Company Overview:
Swiggy Ltd (Swiggy) is a new-age technology company offering users an easyto-use convenience platform accessible through a unified app to browse, select, order & pay for food, grocery & household items (Instamart) and have their orders delivered to their doorstep through on-demand delivery partner network (Genie). Swiggy is amongst the first hyperlocal commerce platforms in India which has successfully pioneered the industry by launching Food Delivery services in 2014 and Quick Commerce in 2020. Swiggy primarily operates in a B2C marketplace platform where it aggregate restaurant & merchant partners that can list their food & products, while users can discover and purchase such items. The company facilitates the fulfilment of these orders through enabling delivery, reservations, payments, and lead generation for partners.
Key Highlights:
1. Pioneers in high-frequency hyperlocal commerce segment: Being among the first hyperlocal commerce platforms, Swiggy is well recognized as a leader and a pioneer in hyperlocal commerce innovation. The company leverages its network of users and partners to assess market attractiveness and demand for new offerings through targeted tests. Once a service is proven viable for achieving scale, profitable unit-economics and geographic reach through these tests, Swiggy start scaling offerings across cities. This innovation-led approach operates as a self-reinforcing ecosystem where offerings help to drive interactions with users, and consequently enhances value for all ecosystem participants.
2. Consistently growing network of users: Swiggy’s unified app, growing offerings and wide network of partners drive greater selections and faster delivery times thus enhances the user experience. As a result, the company has witnessed a consistent growth in Monthly Transacting Users, both in Food Delivery and Quick Commerce segments. As of Jun’24, the company has achieved a milestone of 112.7 million users transacted on the platform. The customer focused approach of developing the platform across offerings, seamless user experience and increasing propensity of users to pay for convenience continues to drive higher engagement and user stickiness on the platform.
3. Strong brand recall: The company is the most valuable brand in the Consumer Technology & Services Platforms category and is among the Top 25 most valuable brands in India overall (Source: Kantar BrandZ Most Valuable Indian Brands Report 2024). Swiggy is the only unified app in India that fulfils all food-related missions of urban users (ordering-in, eating-out and cooking at-home) through its own platform. Swiggy also captures the largest share of consumer wallet in terms of Monthly GOV per MTU (page-213 of RHP) in the hyperlocal commerce use-cases as of Jun’24.
4. An experienced professional management team: The company is led by a team of dynamic entrepreneurs and experienced professional management having industry expertise. The team has demonstrated the leadership skills in innovation and execution prowess in shaping the evolution of the online Food Delivery and Quick Commerce industries in India. The eight-member strong leadership team have an aggregate 52 years of experience with Swiggy.
Valuation: Swiggy, at upper price band of Rs 390.0, is valued at Price/Sales, EV/Sales and P/BV multiple of 7.8x/7.3x/7.1x respectively of its FY24 financials on post issue capital. While comparing with Zomato, the issue appears to be fairly priced on all these parameters. We recommend investors to subscribe the issue for long term investment perspective.
Leave a Reply