The journey of Swiggy started late but it has become the fastest Indian company to reach Unicorn Status by some distance. Flipkart took six years to reach unicorn valuation but Swiggy achieved it in four years. The Swiggy success story is nothing sort of astonishing.
The journey was not an easy ride for Swiggy. Many experts predicted that Swiggy was entering into the already overcrowded market. It was also a late entrant into the market. The Online food services was centered around two companies: Foodpanda and Zomato.
Every entrepreneur goes through fair share of highs and lows in their life, but what separate them from the rest is their commitment and passion to work. They put a lot of hard work and many sleepless night before the glory days. Swiggy story is also the same. The success did not come overnight for Swiggy, the founders suffered failure in their early days. So, here is the inspirational story of Swiggy and how it became household name in India
History of Swiggy
The dream of making online food delivery app started in August 2014 for Sriharsha Majety, Nandan Reddy and Rahul Jaimini. After failing in their previous ventures, this time they tried their luck with an online food delivery company Swiggy.
The start for Swiggy was not easy. Sriharsha Majety and Nandan Reddy two IIT graduates who are the co-founders had tough time as their previous business ventures Bundl failed. In their previous venture Bundl they had built sustainable business model but lacked the technological chops required to build an internet company.
They had the idea and business model but they lacked the technical expert. So, then Rahul Jamini joined, a former Myntra software engineer and IIT alumni. All three co-founders put their respective skill on table and that’s how Swiggy was born in August 2014. They created sustainable business model which helped swiggy to gain top position in the market.
Early Struggle of Swiggy
Starting a business is easy but making it work is the difficult part. Swiggy started in 2014 and around that time many online delivery services were active in India. The first work of Swiggy was to convince the restaurants to join their platform instead of their competitors.
When you compete in the market, you must have competitive advantage or you should not compete at all. What differentiated Swiggy from the rest of online delivery channel was their investment in building a proper logistics network with a vast fleet of their own delivery boys.
After seeing the business model of Swiggy working swiftly and generating revenue for the company, investors starting getting attracted to Swiggy. Swiggy received its first major funding from Accel and SAIF Partners of $2 million dollar.
In 2015, Swiggy was received funding from 2 Venture Capitals along with the Norwest. Swiggy already had over 100 restaurants on board and was delivering over 70,000 orders on a monthly basis by 2015.
The startup Swiggy raised $80 million in Series E round of funding led by Naspers, as other existing investors also participated making it as the biggest funding Swiggy has ever received.
Swiggy Success Factors
When Swiggy started the business, Zomato was the market leader. Zomato the market leader at that time was not interested in expansion of business. But now due to the growth of Swiggy, Zomato is investing heavily to catch up with Swiggy.
Swiggy not only outclassed far old companies such as Zomato and Foodpanda as well as peers, including Tinyowl, which eventually collapsed. Here explaining how Swiggy managed to grow so fast:
Sharp Focus on Logistics
You have to get a lot of things right to be successful and Swiggy has managed to get one important thing right i.e. its excellent logistics operations. The early trend when Swiggy started was to focus on the app and not on the supply chain. All the major companies where focused on making a cool app rather then doing the difficult work of building a supply chain.
Swiggy competitors such as Zomato, Foodpanda and Tinyowl built marketplaces that connected customers to restaurants but “outsourced” delivery to either restaurants or third-party logistics providers. However, Swiggy in its initial year realized that the only way to crack the food delivery market was to build an extensive logistics network. Now, all the other food delivery company are taking control of the delivery themselves.
Catch the trend Early
Sriharsha Majety and Nandan Reddy, two of the founders of Swiggy understood the Indian e-commerce environment from their previous venture. The two IIT graduates had come together in mid-2013 to work on an idea that would fully capitalize on the Indian e-commerce boom.
Their first company was Bundl- that aimed to address a massive pain point in Indian e-commerce—shipping goods across the country.
Bundl app was looking to connect courier companies across India and help them coordinate with each other, while delivering goods for small and medium businesses.
Sriharsha Majety and Nandan Reddy realized that Indian e-commerce market potential was in the online food startups and not on courier service. They caught the startup trend early which brought reap benefits to them in future.
Swiggy started late but it started at the time Indian startup environment was booming. There were investors ready to invest money on the project, the market was supportive of startups.
A Complementary team
The three founders of Swiggy brought different skills to the table and that worked well for Swiggy. Majety and Reddy were from the IIT background whereas Jaimini had previously worked as a software engineer in Myntra and NetApp.
Swiggy success story can be attributed to its core team. The team of three founders brought unique skills to the table, were visionary and controlled their respective field.
Swiggy changed the way food delivery services used to work in India. During the course of changing the industry, it also became the fastest growing startup of India. It crossed unicorn valuation in 4 years. The Success of Swiggy can be attributed to many things and among them is vision and sustainable business model.