Swiggy May Double Platform Fees Ahead of Its IPO

According to sources at Reader Wall, with its highly anticipated Initial Public Offering (IPO) on the horizon, the food and grocery delivery application Swiggy is contemplating increasing its platform fee per order. Currently, the fee is ₹5, but indications suggest Swiggy may double it to ₹10 per order.

Reducing Losses Ahead of IPO

This effort to double the platform fee could be a strategic move by Swiggy to mitigate losses in the lead up to the company’s forthcoming IPO, which is expected to take place within the next few months as per our sources.

The platform fee at present is ₹5 per order, however, there could be a potential rise in the fee targeting a ‘small set’ of users. To remember, a minor platform fee of ₹2 was put into effect by Swiggy in April 2023, which was later ramped up to ₹5.

No Significant Increase in Near Future

Despite the rumors, a representative of Swiggy assures that the enterprise has no immediate plans to substantially elevate the platform fees. “Our ongoing objective is to make our platform more cost-effective. The recent launch of Pockethero is a testament to this focus,” said the spokesperson

Food Delivery Industry’s Challenges

This development follows as Zomato and Swiggy both have escalated their platform fee in the last year, aiming to offset their losses and tackle the difficulties posed by the sluggish food delivery industry growth nationwide. For its food delivery service and grocery delivery app BlinkIt, Zomato applies a platform fee of ₹4 per order. At the same time, Swiggy’s fees stand at ₹5 for food delivery and ₹4 per order for Swiggy Instamart, its grocery delivery service.

High Hopes for Swiggy’s IPO

Backed by Softbank, Swiggy is expected to introduce its IPO early in 2024. Valued at over $10.2 billion in the last round of funding, the company’s worth is likely to see a further increment as revealed in the IPO documents. If all goes well, the Swiggy IPO may garner a cool $1 billion. Leading institutions like Kotak Mahindra Capital, Citi and JP Morgan are likely to have senior roles in the issue. It’s anticipated Swiggy would have filed its Draft Red Herring Prospectus (DRHP) by March 2024.

In its most recent funding round, Swiggy succeeded in raising $700 million, which catapulted the valuation of the company.