Prosus on Monday said that food delivery platform Swiggy reduced its adjusted earnings before interest, taxes, depreciation, and amortisation (Ebitda) losses by 30% between January and December last year to $182 million from $261 million in the previous year.
The Dutch investor added that Swiggy is now seeing the early effects of operating leverage.
In its annual report, Prosus said that during the year, the gross order value (GOV) of Swiggy rose 29% year-on-year, driven by food delivery and a significant ramp-up in its quick commerce business, Instamart.
In the January-March quarter this year, the platform’s GOV rose by around 40%, with food delivery up 18% and quick commerce surging 101%.
Swiggy’s food delivery business has turned contribution positive during Q1FY25, with an adjusted Ebitda margin over GMV of 2.9%.
However, Instamart recorded its steepest losses yet, with a -18% margin, as Swiggy added 316 new dark stores during the period.
Prosus said the quarter marked the “peak of investment” in the quick commerce business, and it will likely achieve the contribution breakeven within three to five quarters.
Swiggy listed on the stock market in November last year. Prosus has been its early backer and started investing in the company in 2017.
Before the IPO, Prosus had invested around $1.3 billion in Swiggy and held around a 31% stake in the company.
It sold some stake in the company during the IPO and currently holds around 24.8%.
In the report, the investor declared that the profit of around $442 million when it sold its partial stake in Swiggy.
“On IPO, Prosus sold 109,096,540 shares in Swiggy for Rs 390 per share yielding $452 million in proceeds and a gain on partial disposal of $442 million,” it said.
The investor, which has also invested in global food delivery companies Delivery Hero and iFood, said that food delivery market will continue to expand due to tailwinds such as rising smartphone penetration, economic development, greater disposable incomes, and the shift to outsourcing everyday services.
“Over time, we believe our food-delivery platforms have the potential to extend their offering even further and provide on-demand retail to consumers and logistics services to merchants,” it said.
Interestingly, Prosus has recently invested in Rapido, which is also looking to launch its food delivery service.
Prosus has also backed several other Indian startups, including BlueStone, Meesho, PayU, Urban Company, PharmEasy, and Eruditus. Of these, Urban Company, BlueStone and Meesho are also preparing for public listings.