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Business Model

Swiggy started in Bengaluru with only 20 delivery executives and a handful of restaurant partners. It now has over 1.5 lakh delivery executives and partnerships with 120,000 restaurants across 500 Indian cities. Though Swiggy raised $2.4 billion in funding, it reported $530 million in losses for FY 2020 as it aims to retain and grow its customer base while expanding into new delivery categories. Swiggy generates revenue from delivery charges, partnership affiliation fees, monthly membership programs, credit card affiliate programs, cloud kitchen ventures, and will soon add co-created delivery brands through its new Brandworks platform.

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58 views

Business Model

Swiggy started in Bengaluru with only 20 delivery executives and a handful of restaurant partners. It now has over 1.5 lakh delivery executives and partnerships with 120,000 restaurants across 500 Indian cities. Though Swiggy raised $2.4 billion in funding, it reported $530 million in losses for FY 2020 as it aims to retain and grow its customer base while expanding into new delivery categories. Swiggy generates revenue from delivery charges, partnership affiliation fees, monthly membership programs, credit card affiliate programs, cloud kitchen ventures, and will soon add co-created delivery brands through its new Brandworks platform.

Uploaded by

Maddy Aku
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Swiggy’s Business Model

Swiggy, the Unicorn that we know today started as a mere online food ordering and delivery app by
Sriharsha Majety, who took the less travelled road as a failed founder of the start-up Bundl but
nonetheless he learnt from the experience. Today, Swiggy boasts close to 50M+ downloads with an
estimated Annual revenue of $ 832.6 M. If this was not impressive enough, when the business started
it only had partnered with a handful of restaurants and 20 delivery executives In Bengaluru and now
swanks an impressive fleet of over 1.5 lakhs delivery executives and 120,000 restaurants partners in
close to 500 cities across the country.

One may presume it was all possible by acquiring close to $2.4 B in funding, it also raised $1B in Series
H making it the single largest fund raise by a food Tech company in India increasing its market valuation
to $5 B, but that’s not the complete story. For FY 2020 the company reported having increased their
revenue by 115%, yet making losses $530 M. The hopes to be profitable in the coming years by
retaining the current customer base & adding new customers while also venturing into other delivery
avenues. The major money drain of Swiggy’s expenditure can be broadly classified in 2 avenues. The
first part would be the fixed cost which includes the salaries paid to employees, payment & incentives
to delivery executives, advertising & marketing costs, and the IT- development cost. The other part
would include, organization & transportation costs, returns & refund requests, and acquisition of
other companies.

Utilizing an innovative platform that works as a single point of the contact between the restaurant and
the consumers, the revenue model of Swiggy is based on a hyperlocal on-demand food delivery and
multi-delivery business operations.

Currently, Swiggy’s business revenue model has 6 significant pillars. The first is delivery charges
associated with all the orders, although it usually ranges from 30-45 rupees, it is significantly increased
when the delivery location is rather far from the restaurant, night delivery charges and high-demand
delivery charges. The second would be the partner affiliation fees which is paid by the restaurants at
the time of joining hands as a partner and also the commissions it takes from the restaurants from
which the orders have been placed. Their next source of income is via the monthly/ quarterly
membership program known as Swiggy super which enables users to get rid of the delivery charges;
being priced at Rs. 149 per month, Swiggy has a significant number of user base availing this service.

Swiggy also offers credit cards from prominent financial institutions such as HSBC, Citi Bank and ICICI
Bank and generate affiliate income from them. Last but not the least, Swiggy also offers high-profit,
low-risks business venture or the Cloud Kitchen known as Swiggy Access. With these delivery-only
models having grown close to 10 times in the last 3 years, Swiggy earns a hefty amount of their
revenue from these ventures.

While this revenue model is all set to jump the current income, the food tech unicorn recently also
announced the launch of Brandworks, a platform to co-create delivery brands with different delivery
partners.

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