Two mega funding rounds in 2018 — with a third one in the pipeline — have fuelled Swiggy’s rapid expansion this year. And there have been signs over the last couple of days that the food-tech firm is perhaps biting off more than it can chew.
If you tried ordering food via Swiggy on Thursday night and were unable to do so, you weren’t alone. Swiggy’s app as well as its mobile and desktop sites suffered an hour-long outage during peak business hours across major cities. There was downtime for about half an hour the previous day as well.
Swiggy is yet to offer a concrete explanation for the outages, other than saying that it was facing technical issues and apologising for the same.
We're up and running, please go ahead and place an order, we'll continue to fulfil your hunger pangs. https://t.co/ZlPAaF9WMI— SwiggyCares (@SwiggyCares) November 1, 2018
We're back to fulfil your hunger pangs! Go ahead and order, we'll continue delivering. https://t.co/mSXSNoGJCp— SwiggyCares (@SwiggyCares) October 31, 2018
"We are aware of the trust our users repose in us and work hard to ensure we’re always up and available for them. We were able to resolve this issue quickly and continued to see extremely strong growth both in traffic and orders," Swiggy said in an emailed response.
According to the company, the downtime was due to an internal error and not related to higher orders than usual or an external breach of data.
TechCircle’s queries about the specifics of the problem remained unanswered.
Incidentally, Swiggy announced on Thursday that it had launched delivery services in 16 cities — in addition to the 28 it already operated in — including Amritsar, Udaipur, Agra, Tirupur, Thiruvananthapuram and Bhubaneswar. The foray into these cities appears to have been executed in a phased manner since the second week of October.
The firm delivered 15 million orders per month at last count.
Swiggy’s rapid expansion has had an impact on its financial performance too. Earlier this week, parent firm Bundl Technologies Pvt. Ltd reported that its net sales had more than tripled to Rs 442 crore in the financial year 2017-18 to narrow the gap with rival Zomato. However, its losses nearly doubled to Rs 397 crore on the back of expenditure that ballooned to Rs 865 crore in 2017-18.
The company has been on a fundraising spree this year. In June, Swiggy raised $210 million in a Series G round led by South African technology conglomerate Naspers and Yuri Milner's DST Global. The investment valued the firm at around $1.3 billion, vaulting it into the unicorn club.
In February, it raised $100 million (Rs 640 crore then) in a Series F round led by Naspers. TechCircle reported last month that Swiggy was close to securing $900 million from Naspers and prominent investors including China's Tencent.
In August, Swiggy acquired Mumbai-based Scootsy Logistics Pvt. Ltd, which delivers food, fashion apparel, home décor, and more. The acquisition is expected to help Swiggy broaden its restaurant network.