Foodtech major Swiggy's GMV rises to $2.6B, Losses Mount in FY23

Foodtech giant Swiggy has witnessed a modest increase in its gross merchandise value (GMV) for the fiscal year 2023, reaching $2.6 billion, according to its largest investor, Prosus. This signifies a growth rate of approximately 13% compared to the previous fiscal year's GMV of $2.3 billion.

Swiggy's expansion in GMV can be attributed to the significant expansion of its restaurant base. As mentioned in Prosus' annual report released on June 27, the company's network now comprises around 272,000 eateries, a substantial increase from the 197,000 eateries in the previous fiscal year.

However, despite the rise in revenue, The startup has also reported an increase in losses. Prosus revealed that its share of Swiggy's revenue surged by 40% to reach $297 million, resulting in Swiggy's total revenue surpassing $900 million. On the other hand, the company's losses witnessed a significant jump of over 80% in FY23, escalating from approximately $300 million in FY22 to $545 million.

Prosus attributed a portion of the increased trading loss to its investments in Instamart, the quick-commerce division of Swiggy. The trading loss for Prosus was $180 million, compared to $100 million in FY22.

During the last two reporting periods, The food tech giant focused on revitalizing its user base, enhancing user conversion, and increasing the monthly frequency of orders. Prosus highlighted in its FY23 annual report that these efforts yielded positive outcomes.

While its losses in FY23 exceeded those of its competitor Zomato, the latter managed to minimize its losses to around $126 million, significantly lower than Swiggy's $545 million. Zomato's revenues were relatively comparable to Swiggy's overall revenue.

Sriharsha Majety, recently announced that the company's core operation, meal delivery, achieved profitability in March 2023 after deducting ESOP charges. This milestone aligns with Swiggy's escalating losses.

Furthermore, Its valuation has faced downward adjustments from some of its investors in recent months. Baron Capital and Invesco, among others, have reduced the company's valuation. Baron Capital Group decreased Swiggy's valuation from its peak of $10.7 billion (following the January 2022 fundraising) to $6.38 billion by March 31, 2023. Similarly, Invesco, the lead investor in a funding round, lowered its valuation by 33% to $5.5 billion, down from $8.2 billion and the previous peak valuation of $10.7 billion.

Despite the valuation adjustments and mounting losses, Swiggy's growth trajectory remains noteworthy, with the company becoming one of the few profitable international food delivery services within just nine years since its inception.

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