Swiggy co-founder and group chief executive officer Sriharsha Majety has said having a listed competitor has its set of pros and cons, as the food and grocery delivery platform prepares to launch its IPO.
The Bengaluru-based Swiggy is slated to go public later this year even as rival Zomato’s share price has been on a tear. The Gurugram-based startup clocked profit for a fifth straight time in the June quarter. The Zomato stock has gained 111 percent this year, pushing its market capitalisation to more than $25 billion.
“Having a listed competitor is both good and bad. We don’t have to explain what on-demand is, what the gig worker economy means and what hyperlocal is – all of these are the positives. The negative is that quarter-on-quarter you are going to be compared on the trajectory,” Majety said at the Moneycontrol Startup Conclave in Bengaluru on August 9.
“We definitely want to make sure that it is a good trajectory and there are many quarters that are good and some that are off – it (having a listed competitor) is a net positive for sure.”
The rivalry between Zomato and Swiggy is not limited to just food delivery. The two also compete in the quick commerce space. While Zomato operates Blinkit, Swiggy runs Instamart, both among the top players along with Zepto.
To a query if there was space for more quick commerce players or would the industry go through consolidation like in food delivery, Majety said it was too early to predict.
“We’re in year three-and-a-half of quick commerce, very hard to predict what will happen. In food delivery’s year three-and-a-half there were many more competitors at the time. The (quick commerce) category is still playing out and penetration is still in early stages, many things will happen in the next few years,” Majety said.
There have been concerns that quick commerce is growing at the cost of kirana (mom-and-pop) stores, Majety said the use cases were different.
Delhivery’s chief Sahil Barua, who also sits on Swiggy’s board, had a different view.
“As quick commerce proceeds, the supply change is going to see a rearrangement. It will impinge on traditional retail,” Barua said at the Moneycontrol Startup Conclave in Bengaluru.
The two were part of a panel discussion on "Startup Street to Dalal Street" along with SoftBank Investment Adviser’s India and EMEA head Sumer Juneja. The session was moderated by Moneycontrol deputy executive editor Chandra R Srikanth.
SoftBank will see three companies from its stable go public in August alone. While Ola Electric listed on August 9, FirstCry and Unicommerce make their market debut on August 13, as reported by Moneycontrol.
Asked if the tech funding and IPO momentum both were back, Juneja said, “We’re still looking for the next Harsha (Swiggy chief Sriharsha Majety, the next Sahil (Delhivery chief Barua)...we’re looking hard and that’s why we haven’t started reinvesting yet. Today, we’re at a $5.5-trillion market cap on the NSE, 25 percent of that should be tech in five years from now. For that we need a lot of that (founder) pipeline to come through,” Juneja concluded.
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