Swiggy vs Zomato: Battle heats up as Swiggy gears up for landmark IPO

As drink gears up for its much-awaited Rs 10,000 crore IPO Scheduled for late 2024, the competition between India’s two food delivery giants: Swiggy and Zomato —is ready to reach new heights. The Macquarie report provides critical insights into the financials, growth trajectories and operational metrics of both companies, highlighting how Swiggy is still playing catch-up with Zomato. Here is a detailed analysis based on the report and other verified sources.

IPO Details: drink vs. Zomato

drink ‘s IPO will include a fresh issue worth Rs 3,750 crore, and the rest will be an offer for sale from investors like Prosus. This IPO, which is expected to value Swiggy between $10 billion and $15 billion, marks the largest public offering in India since Paytm’s IPO in 2021. In comparison, the Rs 9,375 crore Zomato The July 2021 IPO was priced at Rs 76 per share and performed remarkably well, opening at Rs 115 and closing the day at Rs 125.85, a significant increase of 65 percent.

Revenue and Profitability

Both companies have shown strong revenue growth, but drink continues to face profitability challenges. In FY24, Swiggy’s revenue grew 36 per cent to Rs 11,247 crore, while its net loss narrowed 43 per cent to Rs 2,350 crore. Despite this improvement, Swiggy’s focus on aggressive market expansion, particularly on fast trading through Instamart, has contributed to increasing losses.

Zomato On the other hand, it has made significant progress towards profitability. In Q1FY25, Zomato posted a net profit of Rs 253 crore, driven by strong growth in both its food delivery business and its quick commerce subsidiary. flashes . This marks a stark contrast with drink which is still in the red, largely due to its investments in the expansion of Instamart.

Operational metrics: who leads?

According to the Macquarie report, Zomato continues to lead in terms of gross order value (GOV) and monthly transaction users (MTU) in both food delivery and express commerce. Zomato government is expected to reach $4.8 billion in FY25, up from $3.3 billion in FY25. drink . Additionally, Zomato has 20 million MTUs in food delivery, while Swiggy follows with 14 million. Despite these gaps, Swiggy is catching up in order frequency, with users placing slightly more orders per month than Zomato on average.

In fast trading, flashes ( Zomato ) has a strong lead with 7.6 million MTU and an AOV of Rs 625, well above drink Instamart, which has 5.2 million MTUs and an AOV of Rs 487. Blinkit also achieved an adjusted EBITDA breakeven, while Instamart continues to generate losses, although it is showing improvements.

Challenges and growth prospects

While drink has made significant progress in the food delivery market, is lagging behind Zomato between 4 and 6 quarters, especially in terms of profitability. Swiggy’s path to profitability depends on scaling Instamart, reducing delivery costs and increasing advertising revenue. The company is focusing heavily on expanding its dark store network, a critical component of its fast-commerce strategy.

For Zomato Maintaining its leadership will depend on sustaining its recent profitability while expanding flashes . The company has been able to leverage its strong market position and broader product offering, including the acquisition of Blinkit, to drive growth.

Conclusion: a duopoly in transition

As drink prepares for his IPO The competitive landscape between these two giants will only intensify. Zomato With its advantage in both food delivery and quick commerce, it remains the dominant player, but Swiggy’s rapid expansion and focus on operational efficiency suggest it is closing the gap. Swiggy’s IPO will be closely watched by investors not only for its fundraising potential but also for how the company plans to face the fierce competition ahead.

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