Foodtech major Swiggy will invest $700 million in its quick grocery delivery service Instamart, as it extends its dark store network to make deliveries in 15 minutes, by January.
To deliver on the promise of 15-minute deliveries, the company will build a network of dark stores that is close to a majority of its customers. Launched in Gurugram and Bengaluru in 2020, Swiggy Instamart claims to now serve customers across 18 cities and doing over 1 million orders per week. In the last few months, Swiggy Instamart is said to have onboarded more than one seller-run dark store every day.
“At our current growth trajectory, Instamart is set to reach an annualised GMV-run rate of $1 billion in the next three quarters. With our food delivery business trending at $3-billion annualised GMV run rate, and Instamart’s super-charged growth, we’re very excited about our convenience mission coming to life in a very big way,” said Sriharsha Majety, CEO, Swiggy.
Instamart offers an assortment of products across categories like fresh fruits and vegetables, daily bread and eggs, cooking essentials, beverages, instant food and munchies, personal and baby care, home, and cleaning, specially curated to suit the demand requirements of each location.
The grocery delivery service is currently live in Ahmedabad, Bengaluru, Chennai, Coimbatore, Chandigarh, Delhi, Gurugram, Hyderabad, Indore, Jaipur, Kolkata, Kochi, Lucknow, Ludhiana, Mumbai, Noida, Pune and Vizag.
Instamart is one of the company’s non-food verticals which have witnessed tremendous growth after the pandemic. Instamart competes with the likes of Zomato-backed Grofers, Dunzo, OIa Store and Zepto in the quick commerce space.
While announcing its $1.25-billion fundraise earlier this year, Majety had said the company will be investing a big part of its $1.25-billion fundraise, in non-food businesses. According to the interim results for FY22 shared by Swiggy’s investor Prosus, the company's grocery revenues grew 75 per cent compared to March 2021.
Founded in 2014, Swiggy claims to be working with over 1,85,000 restaurant partners and stores in over 500 cities. Prosus had also noted that Swiggy's food delivery revenues have grown by 56 per cent between April to September.
Last month, Swiggy launched its upgraded membership programme ‘Swiggy One’, with an aim to offer membership benefits across all of Swiggy’s services including Instamart, Swiggy Genie, Meat stores, and food delivery.
Redseer’s July 2021 report on quick commerce had estimated the current market penetration of quick commerce to be about $0.3 billion in CY2021 and projected it to grow 10-15x to reach $5 billion by 2025.