Deal focus: Swiggy aims to deliver on food promise

"When we started, food delivery in India was a nascent industry,” remembers Swiggy’s vice president of marketing, Srivats T.S. “We had to tackle several initial challenges, including familiarizing restaurant partners with the business model, gaining customer traction and scaling the delivery fleet with individuals who understood the nuances of food delivery.”

Those challenges overwhelmed many of Swiggy’s competitors, with a number of Indian food delivery start-ups folding in recent years. Now these players have gone, the company sees a clear path to take on the remaining significant competition, such as Zomato and Food Panda. It also has $80 million in dry powder to deploy, thanks to a Series E round led by South African internet giant Naspers Group.

The new round, which also includes existing investors such as Accel Partners, SAIF Partners, Bessemer Venture Partners and Norwest Venture Partners, comes as Swiggy aims to consolidate its market position and deepen its software product. Naspers is expected to provide valuable insight as the company aims to double its technology team while adding machine learning and personalization features.

Furthermore, while one might think the basic food delivery model has been sufficiently proven, Swiggy believes it will continue to find problems to iron out for the near future, along with opportunities for improvements in efficiency and ease of use.

“On the technology front, one of the major challenges has been to accurately predict how much time it would take for food to be delivered to the consumer and to ensure there are no delays in orders,” says Srivats. “Additionally, how does one maintain a large delivery fleet and maintain efficiency, and how do we convince the consumer about the convenience of ordering online?”

Addressing these issues is expected to require significant investments of both time and capital, and like many Indian internet businesses, Swiggy has yet to earn a profit. Some of its most expensive measures are common among its peers, such as hefty discounts and advertisements aimed at building brand awareness and customer goodwill that will hopefully translate into long-term loyalty.

While such actions are needed in order to remain competitive in India’s internet economy, Swiggy believes they could never have brought success on their own. Instead, it sees innovations in relationships with restaurants and customers the key to its six-fold revenue increase and four-fold growth in order volumes over the past year. 

“Our continuous focus on delivering outstanding consumer experience has fueled Swiggy’s growth. As a customer-centric company, we are committed to providing our customers with convenient features like lightning fast delivery, live order tracking, and no restrictions on minimum order,” says Srivats. “These remain our true differentiators, and have helped Swiggy retain its market leadership." 

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• Topics
• South Asia
• Technology
• Expansion
• India
• Growth capital
• Venture
• TMT
• Logistics
• Accel Partners
• SAIF Partners
• Bessemer Venture Partners
• Norwest Venture Partners