In June, food-delivery startup Swiggy entered the Unicorn Club when it raised US$ 210 million in a funding round led by Naspers and DST Global. Swiggy has changed the way Indians now order food online.
The company was reportedly valued at US$ 1.3 billion at the time. There is more to the story that you do not know about.
Swiggy has travelled and transformed a long way from a bootstrapped business venture to becoming India’s fastest Unicorn startup. Making a late entry in the online food ordering space in 2014, it has galloped through its journey and in just four years, it has monopolized the domain. It has also forced its competitors like Zomato, FoodPanda, Uber Eats, JustEat, etc.
During 2014, the market for online food ordering/delivery was already overcrowded. It wasn’t even very attractive and popular among the common masses. Back then, Zomato was the leader in food-tech. The management at Zomato was unwilling to expand its delivery business considering the bold step to be messy and unviable. But now, when Swiggy has reached the pinnacle by becoming the most favourite online food ordering/delivery platform, Zomato is investing millions to catch up with Swiggy.
Zomato has been rendered a runner-up now; from leading brand to a runner-up!
Swiggy was launched in the city of Kormangala, Bengaluru by three Sriharsha Majety, Nandan Reddy and Rahul Jaimini.
Looking at Swiggy’s grand success from a comparative perspective, Flipkart, India’s most successful startup, took over six years to become a Unicorn. Swiggy’s success can be majorly attributed to its sharp focus on logistics. It has controlled the entire value chain of customer experience and has triumphed over such marketplaces. The food – delivery business in India is expected to treble in size over the next three-five years to at least US$ 2.5 billion.
Another factor that contributes to Swiggy’s unprecedented success is taking up the arduous task of building an integrated supply chain. Its competitors built marketplaces that connected customers to restaurants but the responsibility of food – delivery was transferred to either restaurants or third-party logistics. Meanwhile, Swiggy was busy building an extensive logistics network of its own. Following its footsteps, now most of the ventures in food-tech business are developing or taking control of their delivery network.
Swiggy is entirely & truly customer obsessed. Its founders also focused on building a strong management team from the budding stage. These two factors contributed to its huge success margin.
At first, Sriharsha Majety & Nandan Reddy, the BITS-Pilani graduate duo had something else in mind. Together, they built a technology product called Bundl that aimed to address the Achilles heel of the Indian e-Commerce – shipping of goods across India.
With this product, both of them were focusing to connect and integrate courier companies across India with a vision of coordination among them. Bundl was moved to the then market space to target small and medium-size businesses. But, after a few brainstorming sessions, both of them realized that even a bigger realm was waiting to be disrupted… the food – delivery space. So, eventually, they shelved Bundl and decided to crack this space.
Initially, there were numerous challenges ahead of them. The most significant ones being: –
- Is it possible to build a sound business model as such?
- Existing food – delivery startups are running at over millions in losses… how will investors trust a newbie?
- Investors were wary of the food – delivery spaces… how will their trust be earned?
- Sustainability was the biggest question… several food – delivery startups were either already shut down or were acquisitioned.
Therefore, Swiggy’s third co-founder was indicted… an IIT alumni, a former NetApp employee & a former software engineer at Myntra, Rahul Jaimini. Considering Bundl as an accidental blunder, the trio incorporated Swiggy as Bundl Technologies Pvt. Ltd. in August 2014.
Sriharsha Majety was a trader at Nomura but he got disillusioned of his corporate life and left after a year. When Swiggy finally took to its wings, he was termed as the undisputed leader.
Nandan Reddy was a former business consultant… then he launched a Biryani joint in Hyderabad… built a cloud-based tablet that served as a POS device for Galla restaurants to manage billing & inventory.
Swiggy’s success rides high and swift on two factors: –
- Investment in and focus on building a proper, strong & infallible logistics network.
- Developing a vast fleet of their own delivery boys; thereby narrowing the window of accountability.
By now, Swiggy has also invested heavily in large sales force to bring prime restaurants like Truffles on board. Huge investments have also been made in building technology & to make the logistics network more customer friendly and time-&-delivery efficient. Swiggy’s unimaginable success is attributed to creating a social buzz as well. Unlike its rivals, it also started charging its customers for food delivery. Since the enterprise wasn’t suffering losses due to such experiments; the investors’ trust over the business model grew exponentially.
Like many food – delivery startups, Swiggy is also offering lucrative discounts over online ordering. But, what keeps them apart from competitors, is the speedy delivery, consistency, better customer experience turning to customer delight, and much – much more.
Leading the Indian food – delivery space, Swiggy is continuously introducing disruptive and highly differentiated service offerings. Investments are flowing at full across core engineering, automation, data sciences, machine learning & personalization.
Swiggy is fast evolving and so is the Indian tech-savvy citizenry. It has indeed changed the way people now order food online. No one knows what they’ll do next and what they’ve in mind to execute later. But overall, its customers are extremely happy with their experiences with Swiggy… it’s the competitors who are, undoubtedly, very worried about their future.