Swiggy Business Model: Road To $5 Billion Food Delivery StartUp

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Swiggy business model: Ordering food online has been increasing day by day. After a rough day what makes people happy is food. Swiggy is one such model that helps in making a person happy after a rough day because just by following a few steps people can order food from different restaurants at their doorsteps.

Swiggy is one of the leading food ordering and delivering app which is based on the hyperlocal on-demand food delivery business operation. Swiggy list out restaurant within 10-15 km and provide delivery services. This research will make you understand how the Swiggy business model works and how Swiggy earns money.

SWIGGY BUSINESS MODEL: The Beginning

swiggy business model

Swiggy was started by BITS Pilani graduates Naman Reddy and Sriharsha Majety in 2014. The companies’ major job is to provide user satisfaction and delivery on time. The good side is Swiggy processes about 1.4 million orders a day. Swiggy’s business model is quite complex, they had to manage app cost, delivery cost, and advertising cost.

Swiggy has to manage partnerships with restaurants, eateries, retail shops, managing delivery providers (full-time/part-time), marketing of services acquiring customers, management of orders, management technical operations, management of payment process, handling customer concerns.

SWIGGY BUSINESS MODEL: How Swiggy Earns?

1.Delivery charges: Swiggy spent more on delivery services, around Rs 1,593 crore in delivery and Rs 423 crore on salaries.  However, Swiggy charges around Rs 20-30  per delivery. Rs 20 per delivery and they manage 1.5 million orders a day which is quite a huge amount.

2. Commission: Swiggy takes a commission from the restaurant, 15-25% commission per order. In this two-way profit deal, Swiggy, and Restaurant both make money. 

3. Advertising: Swiggy generate revenue from advertising. They promote restaurant by ranking higher in the search result. The ad recommendations boosts restaurants and thrive their orders.

4. Affiliate: This is a little unique way to generate revenue, Swiggy had a partnership with financial organizations such as Citibank, ICICI Bank, and HSBC Bank. Swiggy also its credit cards.

5.  Swiggy Super: Swiggy Super is a premium membership program in which the customers get access to free unlimited delivery above Rs 99 order and customers also get huge discounts.

6. Swiggy Acess: Swiggy came up with the concept of a cloud kitchen.  Swiggy provides kitchen spaces to the restaurants Swiggy is providing exposure to restaurant owners benefiting both Swiggy and Owners.

SWIGGY COMPETITORS

  1. Zomato
  2. DoorDash
  3. Uber Eats
  4. Postmates
  5. GrubHub
  6. ChowNow

SWIGGY FUNDING

swiggy business model

Swiggy is an emerging food delivery app, all the revenue-generating resources are just to cover up the losses. Understanding the market and investors’ response help to manage resources and revenue.

The investor cycle of Swiggy are as follows-

  • Swiggy raised $16.5Million from Accel SAIF Partners Norwest Venture Partners in 2015 in series B round.
  • Then Swiggy $35 Million raised Accel SAIF Partners Harmony Partners Norwest Venture PartnersRB Investments in 2016 in series round C.
  • After that Swiggy raised $80 Million in series E by  Bessemer Venture Partners Prosus (formerly Naspers) SAIF Partners Harmony Partners Norwest Venture Partners.
  • In 2021 Swiggy raised around $ 800 Million in growth equity by Accel Prosus (formerly Naspers) Goldman Sachs Falcon Edge Capital Carmignac.
  • Currently, Swiggy is valued at nearly $5 Billion after the latest investment by growth equity.

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