Swiggy's FY21 sales decline 27% as pandemic-induced lockdowns cripple demand

Credit: VCCircle

Foodtech platform Swiggy, operated by Bundl Technologies Pvt Ltd, has reported a 27% decline in its 2020-21 (FY21) operating revenue as Covid-19 induced lockdowns hit demand for online food delivery during the period, regulatory filings show. 

The recently-turned decacorn reported consolidated operating revenues of Rs 2,547 crore for FY21, against Rs 3,468 in 2019-20 (FY20), according to the company’s filings with the Ministry of Corporate Affairs (MCA). The company’s consolidated total income, too, was down 28% to Rs 2,676 crore. 

However, a sharp decline in cost of materials consumed coupled with a fall in employee benefit costs and miscellaneous expenses that include losses on order cancellation, outsourcing support costs, payment gateway charges among others, led to a near 46% drop in the company’s consolidated total expenses. Swiggy’s consolidated net loss, thus, narrowed to Rs 1,617 crore from Rs 3,920 crore a year earlier.  

Swiggy generates bulk of its revenue through service income where it charges a commission fee to partner restaurants when an order is placed through its platform, on completion of the order. The service income fell sharply to Rs 1,562 crore from Rs 2,352 crore a year earlier. Other than service income, Swiggy earns through deliveries, and reported a near 75% fall in its delivery income during the year. The company also generates revenues by charging fees to restaurants to promote the restaurants on top of its food discovery suggestions and its income through it fell 19%.  

“During the year under review, the Covid-19 outbreak spread rapidly leading to the Government of India implementing various measures to contain the spread of the virus including lockdowns, restrictions on travel, social distancing and other emergency measures. This coupled with the general fear of contraction led to a significant reduction in the demand for food delivery,” the company said in a report. 

Swiggy’s biggest competitor Zomato Ltd, too, had reported a 24% decline in its FY21 revenue. However, Zomato, which got listed in July last year, reported a sharp rise in its revenue for nine months ended December 2021. sharply narrowed its consolidated losses to Rs 67.2 crore in the third quarter of FY22 to Rs 352.6 crore. The losses were also lower sequentially from Rs 435 crore in the previous quarter.  Swiggy's revenues for the quarter ended December 2021 and September 2021 are not yet available. 

Swiggy, last month raised $700 million from Invesco, Baron Capital Group, Sumeru Venture, IIFL AMC Late Stage Tech Fund, Kotak, Axis Growth Avenues AIF- I, Sixteenth Street Capital, Ghisallo, Smile Group and Segantii Capital, in a funding round that had pushed the company’s valuation to $10.7 billion, a rise of almost 95%. The company’s valuation is now higher than Zomato, which on Thursday, ended with a market capitalization of Rs 74,46,848 crore. 

Swiggy has been increasingly investing in its grocery delivery and hyperlocal businesses. In an interview with VCCircle in December, Sriharsha Majety, the company’s Chief Executive Officer had said that the company would look to diversify from the core food delivery business. 

In December, Swiggy had said that it will be investing $700 million in its express grocery delivery service Instamart.  Swiggy has expanded Instamart to 20 cities, according to the regulatory filing. 

The company is also expanding Swiggy Genie, its pick up and drop service, which it claims to be currently present in 68 cities. The company’s meat delivery service, and daily grocery service, Supr Daily are present across all major Indian cities, Swiggy had said. Swiggy also had launched Swiggy One, a membership program with benefits across food, groceries, and other on-demand services by Swiggy. 

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