Sep 6, 2018

I love Swiggy - Food Delivery Giant - My Prediction


How online food delivery platform had made a remarkable business growth in terms of customer acquisition and valuation. Started in August 2014 Nandan Reddy (29) and Sriharsha Majety (31,) both alumni of Birla Institute of Technology and Science (BITS) Pilani came jointly for a common cause and Swiggy was founded in an office space in Koramangala, Bangalore. One neighbourhood, six delivery executives and 25 partner restaurants is what Swiggy started off with in the beginning. Almost four years into the field, Swiggy now has a major presence in Delhi, Mumbai, Pune, Bangalore, Hyderabad, Chennai and Kolkata. By 14 August, the duo made their dream into a reality by rolling out Swiggy, the country’s first online food ordering platform. They roped in Rahul Janimini, an IIT Kharagpur alumni, to do coding work for the platform 
What is Swiggy stand for ? 
Online,  The platform of Food Delivery.  "Swiggy is a food ordering and delivery company based out of Bangalore, India. ... A single window for ordering from a wide range of restaurants, 

Swiggy has its own exclusive fleet of delivery personnel to pick up orders from restaurants and deliver it to customers.  The population of 7 Major cities is appx.100 Million. the consumer now changing their food habits,  and we can see more foody people in the areas.  So daily order from 10% of the population is peanut for Swiggy and related online food delivery company.    

Backed by Investors: Coatue Management, Meituan-Dianping, SAIF Partners, Accel Partners, Norwest Venture Partners - NVP, RB Investments, Bessemer Venture Partners, DST Global, Naspers, Harmony Partners

Swiggy's latest funding round in June 2018 was reported to be $210 m. In total, Swiggy has raised $465.5 m. Swiggy's latest valuation is reported to be $1.3 b.
--------------------------------------------------------Based on the news  that swiggy is targeting to achieve 1 million orders per day by 2020.  .......   if we keep this data for projection and average basket size we take Rs. 500/- then we  can estimate that 360 Million order annually would be there which will have network sales around 18000 Crores  or  USD 2.77 Billion.  This projection sale is network sales but how much gross profit per order Swiggy is going to earn.  Taking all things and keeping average basket size Rs.500 per order, we assume that per order Rs........ will be the revenue of Swiggy ( Service - Network revenue) on per order delivery. 

OTHER REVENUE MODEL:    Swiggy should start   Packaging solution for their suppliers,  Courier Service in the city through their network.  should open cookery Institute where manpower will learn how to serve the customer in Swiggy's style. Spices & Ready to cook  Private Label branding for Suppliers.   

Taking all projections for the next 5 year,  it is revealed that Swiggy will have appx  USD 5 Billion Valuation by end of 2022 .....  USD 5 billion network sales shall generate Tentative Gross Profit of Rs.............. Crores.  

However,  in long run it is very much needed for Swiggy to control operational costs and it should be below industry parameters.  Other competitors will give tough challenge in near months. Achieving network sales of USD 3 billion is not a big mountain peak but for this annually need 20% to 30% growth in the number of orders and also average basket size need to be increased.  

The Indian Food market is huge and changing food habits will definitely provide Swiggy  a better platform to perform,   If we go by population and demography  getting yearly 1000 million order is not a big task,   one who has this caliber and passion can get it.   for getting above data  reference has been taken from : 

Based on the projection nobody can predict that after 5 or 7 years what will happen but business having a dependency on IT having more challenges. so here Swiggy has to make them self ready for the innovation in IT-based services and accordingly for making short term sustainability they have started other avenues so that they can sustain in the short run.  No doubt funding support is there but since things are moving as desired so it can go as per plan. 

We are confident that Swiggy will have USD 5 Bn valuation by end of March 2022. 

Written by : Balwant Rana,
Year 2018



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