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Naspers-backed Swiggy battles allegations of fudging, deceit

26 July, 2017

A group of four people claiming to be former and current employees of Swiggy.com has accused the food ordering startup of lying to investors with inflated sales numbers and resorting to unethical practices.

In a post on blogging site Tumblr, the anonymous employees made serious accusations about the way the food delivery company has been functioning. The bloggers alleged financial irregularities and claimed the company has a demoralizing work culture and substandard operational efficiency. The company has denied the allegations.

They also said the firm lied to its investors with inflated order volumes during the latest fundraise and alleged that the details of the firm’s unit economics presented to investors were incorrect.

“Our January 2017 order volumes were less than December 2016 volumes… But we have seen the investor presentations, and they have shaved off the December numbers in the slides in order to show a linear growth curve across all months of our existence,” the blog post said.

Swiggy, run by Bengaluru-based Bundl Technologies Pvt. Ltd, refuted the allegations in a Facebook post and said that the blog post was targeted at “maligning” its reputation. “The article carries inaccurate facts regarding business and order numbers,” it said.

The company, which competes with the likes of Zomato and Foodpanda, had raised $80 million in its Series E round of funding led by South African technology group Naspers in May this year. It also counts Accel India, SAIF Partners India, Bessemer Venture Partners and Norwest Venture Partners among its investors.

The fundraise in May took the total amount that the company has mopped up so far to about $155.5 million. It had earlier mobilised $15 million in a Series D round in September 2016 and $35 million in its Series C funding in January 2016.

Squeezing restaurants, poor work culture

The blog post also said that Swiggy’s management wants sales executives to get an average commission of 30% from partner restaurants by 2022. While it could be the normal course of action for an online delivery company, the authors said that large restaurants would not pay anything more than 20%, so the small ones mostly bear the brunt.

“Some restaurants are paying us more than their net margins because Swiggy, in some areas in Hyderabad and Bangalore, accounts for a significant portion of their sales—at first it was 5%, then 10% and now nearly 25%. The management wants us to take this to an average of 30% in the future,” the blog post said.

In its Facebook response, the company denied the allegations. “Swiggy has grown over the last few years on the back of strong support from our restaurant partners, employees, delivery executives, consumers and investors. Our restaurant partners are at the heart of our success – our joint vision of providing a complete food ordering and delivery solution from the best neighbourhood restaurants inspires us,” it said.

The blog post also alleged that the company was routing users to The Bowl Company, the cloud kitchen Swiggy launched recently. Besides, it claimed the company puts up paid reviews on social media to enhance its popularity.

Besides, the writers raised questions on the company’s work culture, operational efficiency and treatment of delivery executives. “At any given point in time, 10-15% people are showed the door. There is so much churn, and so much dissatisfaction,” the blog post said.

The blog post claimed that delivery executives are treated so badly that there’s a sign of the beginning of unionisation among them. “We keep changing our incentive structures for delivery boys every now and then… They have no health insurance. They have a dangerous job, and nobody takes accountability for them. If someone meets with an accident, Swiggy doesn’t take any liability for it,” the blog post alleged.

Swiggy, however, said the post not only references employee departures from a year-and-a-half ago but also presents details on its partners “out of context and with mischievous intent”.

“As a startup, we take pride in the culture of mutual respect and common purpose that has helped us grow thus far. We are committed to winning together with all our stakeholders who we have always engaged with, in complete transparency and integrity,” Swiggy said.

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Naspers-backed Swiggy battles allegations of fudging, deceit

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