- June 28, 2023 / 6 min readOverall, the food delivery business for the investment firm grew and it cited growing importance of convenience in people’s daily lives as one of the main contributor.
Bengaluru-based food delivery platform Swiggy has experienced a significant increase in losses during the financial year (FY) 2023, said Dutch-listed tech investor Prosus in its annual report on Tuesday.
“As economies of scale unfold, our Food Delivery portfolio companies delivered strong growth. Total gross merchandise value (GMV) grew 18% (27%) YoY, translating into US$4.2bn or 40% (44%) growth in revenue,” shared Prosus in its report.
As a majority shareholder with 33 per cent in Swiggy, Prosus reported that its share of loss in Bengaluru-based Swiggy rose to $180 million in FY23, up from $100 million in FY22. This increase was attributed to investments in Instamart, Swiggy’s quick-commerce arm, which 'peaked' in the year.
Swiggy, however, stated that its peak investments in Instamart was behind the company.
Swiggy's losses for the entire FY23 amounted to approximately $545 million, representing an 80 per cent increase compared to around $300 million in FY22.
Similarly, Prosus disclosed that its share of revenue in Swiggy grew by 40 per cent to $297 million in FY23, indicating Swiggy's full-year revenue for FY23 to be around $900 million.
Prosus also pointed that Swiggy’s focus on reactivating users, increasing monthly frequency and improving user conversion as factors reflected in the company’s FY23 results.
Overall, the food delivery business for the investment firm grew and it cited growing importance of convenience in people’s daily lives as one of the main contributor.
“Grocery delivery offers an appealing consumer experience and is a natural adjacency to core restaurant food delivery. The group is currently exploring various 1p and 3p models to enhance the unit economics of these businesses. The segment’s grocery-delivery and quick-commerce businesses grew GMV by 18% (14%). Our three main food-delivery portfolio companies, iFood, Delivery Hero and Swiggy, continue to capitalise on these trends by building grocery-delivery businesses on their existing platforms,” the report added.
As per the report, Swiggy's gross merchandise value (GMV) only grew to $2.6 billion in FY23, up from $2.3 billion in FY22, representing a modest increase of approximately 13 per cent.
“We are confident that our food-delivery businesses will be significantly profitable and continue to offer long-term growth. Underscoring this confidence, we recently took full control of iFood for €1.5bn (about US$1.6bn) plus a contingent consideration of up to a maximum of €300m at a future date,” added the report further.
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