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Puru BhatnagarTop Contributor
Business Analyst, Entrepreneur, Business developer, Marketer
Asked a question 2 years ago

What is the reason behind startups like Swiggy, Dunzo is in loss?

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Why swiggy is in loss?

As Swiggy’s footprint expands over India, its losses are ballooning too.

Swiggy saw its losses rise sixfold to Rs. 2,364 crore in the financial year ending March 31, 2019. Its losses last year were Rs. 397 crore. Revenues, on the other hand, increased only 2.7x to Rs. 1,297 crore. 

Swiggy has been expanding aggressively over the last year. It now operates in 500 cities, up from 30 a year ago, and has expanded into several new verticals. It now performs Dunzo-like concierge deliveries through Swiggy Go, and delivers groceries through Swiggy Store. 

Swiggy
Swiggy

But competition in the space is still intense. Even though Foodpanda has bowed out of the food aggregator race, Swiggy is currently battling it out with Uber Eats and Zomato for its share of the food delivery pie. Zomato, for its part, had revenues of Rs. 1420 crore compared to Swiggy’s 1297 crore, and had losses of 2026 crore, compared to Swiggy’s 2364 crore. 

Dunzo is in loss?

Hyperlocal concierge and delivery startup, Dunzo's loss widened to Rs 169 crore in FY19, an increase by 671 percent compared to a loss of Rs 21.9 crore in the previous year, documents filed with the Registrar of Companies (RoC) said.

Dunzo
Dunzo

The startup reported total revenue of Rs 3.5 crore in FY19. Of the total revenue, Rs 76 lakh was generated from “revenue from operation” and the balance, Rs 2.7 crore was from “other income”.

The development comes after Dunzo raised $45 million in its Series D round. 

Now, Swiggy entered the space with a ready fleet of delivery executives and an established name, which would make it difficult for Dunzo as it aims to expand to 20 cities.