Swiggy IPO vs Zomato: Pre-IPO Financial Comparison

The food delivery industry in India has seen tremendous growth over the last few years, with Swiggy and Zomato leading the market. These two giants have been in fierce competition, each vying for dominance in an increasingly competitive landscape. While Zomato is a publicly listed company, Swiggy filed its DRHP with SEBI recently in September 2024. As Swiggy IPO approaches, let’s compare the pre-IPO financial performance of these two industry leaders to understand their market positions and growth trajectories.

Revenue Growth and Market Share

Zomato, which was founded in 2008, is the older of the two and has managed to capture a larger portion of the market, thanks to its diverse offerings, which include restaurant reviews, dine-in services, and food delivery. According to a Goldman Sachs report in June 2024, Zomato likely holds a 56-57% market share in the food delivery market. 

Swiggy, which launched in 2014, has grown quickly, focusing primarily on food delivery and expanding into grocery delivery during the COVID-19 pandemic.

In FY 2024, Zomato reported a total income of ₹12,961 crore, compared to ₹7,761 crore in FY 2023. Swiggy, in comparison, generated a total income of ₹1,16,343.49 million in FY 2024. While Zomato’s revenue is slightly higher, Swiggy has been rapidly closing the gap, primarily driven by its focus on expanding its services beyond food delivery to grocery and essential items through its Instamart platform. 

However, it is to be noted that the total income of Zomato in FY 2021, that is pre-IPO, was ₹21,184.24 million, which is less than Swiggy’s pre-IPO total income. 

Profitability and Losses

Zomato, which went public in July 2021, posted a net loss of ₹8,164.28 million in FY2021. In FY 2024, Zomato’s profit for the year was ₹351 crore. 

IPO-bound Swiggy, on the other hand, reported a net loss of ₹23,502.43 million for FY2024, a decrease from -₹41,793.05 million in the previous year. 

Expansion and Diversification

A key point of distinction between Swiggy and Zomato is their approach to diversification. While Zomato has focused on building a presence in restaurant listings, reviews, and dine-in services, Swiggy has expanded into grocery delivery through Instamart and hyperlocal services like Swiggy Genie, which offers pickup and drop-off services for personal items. This broader focus could give Swiggy an edge in the long run, as it taps into multiple revenue streams. In addition, Swiggy has ventured into dining services through its Swiggy Dineout platform, which offers deals and discounts at restaurants. 

Zomato, however, has also been eyeing diversification. The company acquired Blinkit, a quick-commerce platform, in 2022, and entered the instant grocery delivery space. 

Conclusion

Currently, Swiggy and Zomato continue to dominate India’s food delivery landscape. As the anticipated Swiggy IPO approaches, the competition between these two giants is expected to continue to shape the future of India’s food-tech industry, making this an exciting space to watch.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.