Swiggy, an online food ordering and delivery platform, saw its losses more than double during the last financial year even as the firm’s revenue grew over two-fold. The net loss of the foodtech unicorn widened to ₹3,628.9 crore for FY22, against a loss of ₹1,616.9 crore in the previous fiscal, weighed down by a sharp spike in expenditure. Swiggy, which is competing fiercely against Zomato’s online delivery platform Blinkit, Zepto, and BigBasket, has been investing aggressively to expand its offerings, including the instant-delivery service in the South Asian market.
Swiggy’s revenue from operations jumped 2.2 times to ₹5,705 crore during the fiscal year ending March 2022 compared with ₹2,547 crore in FY21, as per its annual financial statement with the Registrar of Companies (RoC). Segment wise, revenue from rendering platform services grew 83.3% YoY to ₹3,444 crore, while revenue from sales of grocery and FMCG products surged nearly 4 times to ₹2,036 crore in FY22.
Meanwhile, the total expenses of the company, which operates in over 500 Indian cities, shot up to ₹9,748.7 crore, from ₹4,292.8 crore a year ago, primarily due to rise in outsourcing support cost and establishment of procurement centers (dark stores). The company’s advertisement and promotion cost touched a record high of ₹1,848.7 crore in FY22, up 300% from ₹461 crore in FY21. While outsourcing support cost, which accounts for 24.5% of the total expenses, jumped 2.3 times to ₹2,350 crore against ₹1,031 crore in the previous fiscal. The product procurement cost also rose 4 times to ₹2,268 crore, from ₹570 crore in FY21.
On the operational front, EBITDA margin shrank by 918 basis points to -52.88% in FY22 versus -43.7% in FY21.
Swiggy, along with other startups face funding challenges amid a spike in interest rates by central banks globally to tame boiling inflation and fragile economic conditions. Investors are less willing to invest in companies that failed to demonstrate healthy growth. At a $10.7 billion valuation, Swiggy last raised funding $700 million in a financing round in January last year, led by Invesco.
Amid rising losses, Swiggy announced the closure of its cloud kitchen brand, The Bowl Company, in Delhi and the national capital region (NCR) in November last year. The food and grocery delivery company also started restructuring its teams and reportedly plans to sack nearly 250 employees, nearly 3-5% of its total workforce, to cut costs.
In July last year, Swiggy announced a permanent work-from-anywhere policy for the majority of roles, which was claimed to be among the first in the startup space. The decision was taken based on team needs and feedback from several managers and employees who vouched for the flexibility and increased productivity working from home has given them in the last two years. Under the policy, the corporate, central business functions and technology teams will continue to work remotely and converge once every quarter at their base location for a week to promote in-person bonding.
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