After 9 years of doing business, Swiggy's marquee food delivery business has finally achieved profitability.
The Bengaluru-headquartered startup which counts Prosus Ventures, SoftBank and Invesco among its backers became profitable in March this year, CEO and Co-founder Sriharsha Majety said in a blog post, eclipsing its publicly-listed rival Zomato on another key metric, per a TechCrunch report.
However, it's important to note that Swiggy as a whole company is still not profitable, primarily due to the high costs associated with its instant grocery delivery service, Instamart. The company made substantial investments in Instamart and is burning over $20 million per month.
Nevertheless, Swiggy remains optimistic about Instamart's growth and profitability, highlighting its leading position in the quick commerce space. Also, Swiggy says its acquisition of Dineout has enabled it to become a leader in the dining-out category.
It is worth noting that this development comes two days after U.S.-based asset management firm Baron Capital Group reduced its valuation of Swiggy by 34% to $7.1 billion as of December 2022.
It also comes at a time when India's $20 billion food delivery market is facing a critical juncture with several consolidations and exits taking place in recent years. Notably, Uber made a strategic decision to sell its food delivery unit in India to Zomato, while Amazon opted to exit the food business altogether late last year.