Food and grocery delivery application Swiggy teased raising its platform fee per food order ahead of its much-awaited initial public offering (IPO). It is likely that Swiggy will double its platform fee from ₹5 to ₹10 per order, reported Moneycontrol.
According to the report, Swiggy might double its platform fee for users in an effort to reduce its losses ahead of the IPO, which is expected to be issued in the next couple of months.
The current platform fee for Swiggy stands at ₹5 per order, but the application has hinted at a potential fee hike, targeting a “small set” of users. In April 2023, a nominal platform fee of ₹2 was introduced by Swiggy, later increased to ₹5.
However, a Swiggy spokesperson said that the company “has no plans for a significant increase” of the platform fees in the near future. “We’re always looking for ways to make our platform more affordable, and our latest offering, Pockethero, is another example of that,” the spokesperson said.
This comes as Zomato and Swiggy both have hiked up their platform fee over the last year in order to reduce their losses and combat the challenges posed by the slowed-down growth of the food delivery industry across the country.
Zomato charges a platform fee of ₹4 per order for its food delivery app, and grocery delivery app BlinkIt. Meanwhile, Swiggy charges ₹5 for food delivery, while Swiggy Instamart charges ₹4 per order for groceries.
Swiggy IPO details
Softbank-backed Swiggy is expected to launch its IPO in the early months of 2024. During the last round of funding, Swiggy was valued at over $10.2 billion, and it is likely that the in the IPO papers, the valuation of the company will be increased.
Swiggy IPO is expected to raise $1 billion for the firm, with Kotak Mahindra Capital, Citi and JP Morgan likely picked for senior roles in the issue. Media reports suggested that the draft red herring prospectus (DRHP) will be filed by Swiggy in March 2024.
In its most recent round of funding, Swiggy ended up raising $700 million, boosting the valuation of the company.