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Swiggy lines up $100m to deliver milk, other essentials

Shreyas Nagdawane and Puneet Kumar, who started the company in 2015, are leading the business after the acquisition by Swiggy.

Updated: Jul 10, 2019, 05.18 PM IST
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Consumers, especially with a fast-paced urban lifestyle, can subscribe for weekly, monthly or quarterly milk delivery service on Supr Daily where they can add other products like bread and eggs on a need basis.
Bengaluru: Swiggy will invest $100 million (over Rs 680 crore) for its subscription-based delivery business under Supr Daily, which delivers milk and other daily essentials to consumers, according to two sources familiar with the development. Swiggy acquired Supr Daily last year even though it hasn’t made an official announcement on the same. The unit is already doing more than 1 lakh deliveries per day in six cities including Bengaluru, Mumbai and Delhi-NCR.

Shreyas Nagdawane and Puneet Kumar, who started the company in 2015, are leading the business after the acquisition by Swiggy.

The development comes as the online food delivery player has also forayed into hyper-local delivery business under Swiggy Stores and subscription-based home cooked meal with Swiggy Daily. It aims to drive a higher frequency of orders, leverage its growing logistics network as well as the brand built on food delivery. Swiggy had raised $1 billion in December last year and is in the process of raising another $500-600 million, as TOI reported last month.

Swiggy’s investment in Supr Daily, which is planned for two-three years, comes at a time when the space is seeing heightened action in the micro-delivery space from vertical players like Milkbasket and DailyNinja, along with horizontal players like BigBasket. Swiggy is believed to have grown its monthly user base by 10 times to about 1,50,000 in the last six months, the people mentioned earlier added.

Consumers, especially with a fast-paced urban lifestyle, can subscribe for weekly, monthly or quarterly milk delivery service on Supr Daily where they can add other products like bread and eggs on a need basis. This could be for one-time delivery along with the milk delivery subscription. For Supr Daily, 70% of its gross sale is from milk while the rest comes from non-milk products. This is similar for Supr’s rivals as well.

“The segment Supr Daily is working in is serving such a necessity that it can be scaled up beyond the top 10 cities. Swiggy has made in-roads in rural markets and Supr Daily can be taken there too based on the convenience this model offers,” a person aware of the company’s plans said. Another person aware of the goings-on said. 60% of the orders come from huge gated societies, where it can serve a large set of customers, bringing down its delivery costs.

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An email sent to a Swiggy spokesperson did not elicit any response on the matter.

According to Sagar Yarnalkar, co-founder and CEO of DailyNinja, which competes against Supr Daily, the overall market at present sees 2,70,000-3,00,000 orders per day. DailyNinja raised an undisclosed amount of funding led by Matrix Partners in September last year. Yarnalkar said his daily order volume has grown to 90,000 from about 30,000 in January this year.

These startups typically see an average order size of Rs 70-90 per day since the focus is on milk primarily. The people mentioned earlier said consumers tend to buy non-milk products more often after subscribing to milk delivery. Milkbasket has also raised $26 million from Unilever Ventures and Kalaari Capital.
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