Inception to IPO and building institutions: The Swiggy story

As Swiggy's market capitalisation touched $12.3 billion (approximately Rs 1.03 lakh crore) on debut in India’s public markets, Group CEO and Founder Sriharsha Majety said that the on-demand food delivery platform was looking to build more pioneering products for the Indian consumers in the coming decades. 

“...given my love for the Tata Group, we really want to build a company that touches the lives of all the people it comes into contact with, positively,” said Majety in an interview with Shradha Sharma, Founder and CEO of YourStory, at Swiggy’s listing-day celebrations at Bastian - At the Top in Mumbai. 

On day one of listing, Swiggy’s shares closed at 10.48% higher than listing price at Rs 464 apiece. The company’s Employee Stock Ownership Plan (ESOPs) have also catapulted nearly 500 employees into the crorepati club with the listing. 

The journey from starting out in 2014 to listing on the bourses has been a learning curve, with the company reiterating its value proposition for consumers.

“There have been crazy ups and there were crazy downs, and you just power through it. I'm pretty sure that it would have been a million times harder if I wasn't in love with the problem or condition. But I think for everyone who chooses entrepreneurship, this is a rite of passage,” he added. 

Swiggy and its publicly listed competitor Zomato both address a serviceable addressable market of $30 billion for online food delivery platforms, as of CY23. According to a report by JM Financial Services, the online food delivery market in India is expected to grow by 1.2 to 1.5 times of the organised food services industry. 

The upside has also ensured that investors remain bullish on their bets in the sector. “To be a platform which is touching the lives of 100 million people in urban and Tier 1 India is just the tip of the iceberg, with Instamart the opportunity is massive. Very rarely do you come across an investment or tech opportunity which can truly be a $50 billion opportunity, the way India is going and we are consuming,” said Sumer Juneja, Managing Partner and Head of India and EMEA investing at SoftBank in the interview. SoftBank did not sell its stakes in the company as part of the OFS (Offer For Sale), continuing to hold on to a 7.4% stake in Swiggy. 

While online food delivery is one part of it, investors are betting big on the quick commerce opportunity presented by Swiggy’s Instamart vertical. “Building a company which is $12 billion in 10 years, is no mean feat. Running two businesses at scale growing fast, one already profitable, the other one trending in the right direction is rare,” said Ahsutosh Sharma, head of investments for India and Southeast Asia at Prosus Ventures. Prosus continues to be the largest shareholder in Swiggy with 24.8% holding in the company as of November 13, 2024. 

Anand Daniel, Partner at Accel India, which was among Swiggy’s earliest institutional backers in 2015, added that being consumer-obsessed has helped Swiggy stand the test of time.  “When Harsha started (with Swiggy), there was no belief that delivery can happen in 30 minutes and now we take it for granted. Everyone had questions around the business model. The thing that stood out is the consumer need,” said Daniel. He added, “Harsha and the whole team have been true to the consumer-first thinking and figuring out the business along the way.”

From inception to IPO, for team Swiggy it is back to the grind from tomorrow. “I am itching to get back to work,” said Majety.