Food delivery platform, Swiggy is facing major competition in the Indian market as the company ran by Bundl Technologies has reported a loss of Rs 2,363 crore in the financial year ending in March 2019. As per the filing to the Ministry of Corporate Affairs (MCA), Swiggy reported operating revenues of Rs 1,128 crore in the last fiscal year. The numbers are completely in contrast with the last year's performance where its revenues stood at Rs 418 crore, while its losses were at Rs 397 crore.
Notably, the development has come amid its arch-rival Zomato is planning to buy UberEats for an unconfirmed amount up to $200 million. As per a report in the financial daily, the Economic Times, if the talks of the merge that is in advanced stage go ahead, the merged entity may become the biggest company by a number of orders and size ahead of Swiggy in the fiercely fought and cash-intensive online food delivery market in India.
One of the people privy to the development said, "While the agreement is not signed yet, they are in a period of exclusivity, which means both parties cannot engage with others. Uber's capital commitment can range between $100 million and $200 million, but this may be along with a few other investment funds."
Swiggy incurred Rs. 113 crore loss due to order cancellation
Meanwhile, the South African internet and media group Naspers which are two major investors in Swiggy witnessed its losses growing more than five times. The reason attributed to losses includes the exponential jump in costs of the company due to its expansion in new geographies. At present levels, Swiggy is operating across 500 cities in India and as per the industry estimates, operating around 1.4 million orders a day.
In the last fiscal, the company spent Rs 1,593 crore on delivery costs along with Rs 423 crore on salaries and wages. Further, Swiggy burned Rs 778 crore on marketing and advertising expenses. The company lost around Rs 113 crore in order cancelation.
On the other hand, its rival, Zomato reported a loss of Rs 1,001 crore on a revenue of Rs 1,397 crore during the same period. The Indian delivery market is witnessing stiff competition between the players. Swiggy and Zomato have been burning around $40-50 million per month. Both the companies are in talks with the investors to raise a fresh amount of around $500-$600 million.
