Swiggy is getting busy with its hyperlocal delivery business through Supr, a startup that it acquired last year. Swiggy has plans to invest $100 million spread over the next 2-3 years according to reports. Supr was primarily into delivering milk based on subscriptions and under Swiggy’s management the product offerings may be enlarged to add other daily needs and essentials too.
Supr will be managed by the two original founders of the startup, Shreyas Nagdawane and Puneet Kumar, who have agreed to continue with their roles after selling their stakes to Swiggy.
Supr has already started functioning out of six cities, making over 100,000 deliveries per day. Maybe the company carried out a soft-launch of this service without much fanfare. The cities being currently serviced by Supr include Delhi-NCR, Mumbai and Bengaluru.
Swiggy also has a couple of SBUs within its main operation going by the names of Swiggy Daily and Swiggy Stores. There too are engaged in the hyperlocal delivery space and Swiggy Daily is attempting to deliver home-cooked meals to customers.
Supr will vie with rivals like Milkbasket and DailyNinja, the other startups in the same hyperlocal delivery space. Others like BigBasket are also serious contenders for the subscription-based business for daily delivery of essentials like milk, bread and eggs. Most of these service providers start with milk subscriptions which is the easiest to enlist and then the customers slowly add other items as well. All of them therefore deliver milk as the main product within this narrow portfolio.
The advantage Swiggy might gain with Supr is the network already created that goes beyond the metropolitan cities into the next tiers which can help it scale the business up rapidly. The emergence of large gated communities in cities comes handy to these companies since they save on delivery costs with a bunch of customers concentrated within one complex. The overall profitability of this business will however depend largely on the per day/per household bill value, which is currently being quoted at around Rs 70 - Rs 90.
Swiggy has had no dearth of funds and had raised $1 billion only towards the end of last year and has plans to raise another $500 to $600 million soon.