Foodtech major Swiggy becomes profitable, announces CEO Sriharsha Majety

In a major development, foodtech major Swiggy has said that it has turned profitable. The news was shared by the company's co-founder and CEO Sriharsha Majety, who announced it in a blog post on Thursday. He wrote, "This is a milestone for food delivery globally, not just for us, as Swiggy has become one of the very few global food delivery platforms to achieve profitability in less than 9 years since its inception." 
 
The announcement comes days after Swiggy’s investors -- Invesco and Baron Capital -- marked down the valuation of the food delivery giant. Moreover, the update also comes a day before Swiggy’s rival and NSE-listed Zomato is slated to announce its Q4FY23 results. 
 
“This is a milestone for food delivery globally, not just for us, as Swiggy has become one of the very few global food delivery platforms to achieve profitability in less than 9 years since its inception,” Majety wrote in the post. 
 
The CEO also factored the reasons that have led to the company hitting the profitability benchmark. “Our sharp focus on innovation, coupled with strong execution has led to yet another milestone- As of March 2023, Swiggy’s food delivery business has turned profitable (After factoring in ALL corporate costs; excluding employee stock option costs),” he said. 
 
In the coming times, Majety highlighted that the company’s aim is to penetrate deeper into the Tier II and III markets, keep exploring the unventured geographies and segments, and continue to take measures to fuel the growth of the food delivery industry.

Swiggy's story over the last few months
 
The food delivery giant has been taking measures to cut costs, dispose of the non-viable business verticals and aim for profitability. The company is reportedly undertaking these activities to make a debut on the stock market soon.

A few weeks ago, the Prosus-backed company pulled the plug on its premium grocery delivery pilot program, Handpicked, which was functional in several parts of Bengaluru. It also shut down its meat marketplace vertical in January and laid off 380 employees as part of a company-wide restructuring activity in the same month. 
 
Business Today also reported last month that the company has started charging a Rs 2 platform fee on food orders being delivered in cities such as Bengaluru, Hyderabad, and Chennai. This charge is being levied only on the food orders and not on orders made on Swiggy’s quick commerce vertical, Instamart.
 
Swiggy had confirmed this move and said that charging the fees helps them “operate and improve our platform and enhance app features to deliver a seamless app experience.”
 
In an email to the employees of the company, Majety had explained the intention behind taking these measures. He wrote, “The growth rate for food delivery has slowed down versus our projections (along with many peer companies globally ). This meant that we needed to revisit our overall indirect costs to hit our profitability goals..”
 
Also Read: Zomato launches its own UPI offering, Flipkart to follow soon