Bengaluru: Online food ordering platform Swiggy says it clocked 1 million orders in April, a milestone it achieved for the first time since it started operations in 2012. This may also be the highest for any food delivery venture in India.
With 5,500 restaurants in its network, Swiggy got an average of 35,500 orders per day in April, a growth of 25% over the previous month.
The Bengaluru based company said its tech-based delivery algorithm, live tracking of orders and 4,200 delivery boys had helped the company grow its orders. Growth, it said, has picked up since January “We don’t do heavy discounting and have organically grown our user base. Our repeat rates are massive – a repeat customer on an average orders five times a month,” said Nandan Reddy, co-founder of Swiggy. He said the company is operationally profitable in Delhi/ NCR, Mumbai and Bengaluru, three of the eight cities it operates in. Swiggy’s mobile app has been downloaded 1 million times, and the company sees almost 70% of its orders come from the app.
Swiggy was founded by IIT and BITS-Pilani alumni Reddy, Sriharsha Majety and Rahul Jaimini. In January, it raised $35 million in a third round of funding – from existing and new investors including SAIF Partners, Norwest Venture Partners and Accel Partners – a time when com-petitors like Tiny Owl, Zomato and Foodpanda, were laying off people.
In November 2015, TinyOwl shut operations in 4 cities and laid off 112 employees. This was just a month after it had laid off 200 employees. That month also saw food ordering platform Dazo shut operations, after failing to raise a follow-on round of funding. Zomato, which started as a restaurant listing venture and which entered food delivery much later, dismissed around 300 employees a few months ago.
Reddy said Swiggy tried to differentiate itself by not focussing on discounts. It is also one of the few players that charges a delivery fee. “We are not just going after ram-pant growth,” he said. Ash Lilani of venture cap-ital firm Saama Capital said startups in the food tech sector are now moving away from customer acquisition and focussing on unit economics.
“In India, startups were taking no charge for delivery and offering cashback, the focus was on customer acquisition. That is where most startups stumbled. People also underestimated the challenge of launching in new cities. Operations cost for food delivery was different in different areas,” Lilani said.
Reddy said Swiggy is well capitalized for now and is aiming to get to operational profitability in its eight cities over next three quarters.
