Swiggy to Inject ₹1,000 Crore into Logistics Arm Scootsy

Food delivery giant Swiggy announced on Friday a significant investment of up to ₹1,000 crore in its logistics unit, Scootsy Logistics, marking another significant move in India's competitive quick commerce sector.

According to regulatory filings, the investment, which values Scootsy shares at ₹7,640 each, will be completed in one or multiple tranches. This follows Swiggy's earlier commitment of ₹1,600 crore to Scootsy through a rights issue in December 2023.

Scootsy Logistics, which manages Swiggy's dark store network, has shown remarkable growth, with revenue surging 57.2% to ₹5,795.7 crore in FY24 from ₹3,686.2 crore in the previous fiscal year. The unit specializes in supply chain services, including warehouse management, in-warehouse processing, and order fulfillment solutions for wholesalers and retailers.

The fresh capital injection aims to strengthen Scootsy's working capital position and support its expansion plans as demand for quick commerce services grows in India. Notably, Scootsy began as a premium food delivery service that Swiggy acquired in 2018, though those operations were discontinued in 2020 due to losses.

In other news, Swiggy also announced the allotment of 1.71 crore equity shares under its employee stock option plans (ESOP 2015 and ESOP 2021). This move increases the company's paid-up equity share capital from ₹226 crore to ₹228 crore. The company also confirmed that these newly allotted shares will have equal rights to the already existing equity shares.

The investment into Scootsy comes at a very critical time when numerous quick commerce players are facing a hard time. Their unit economics and the path to profitability are being questioned, thus highlighting the strategic importance of efficient logistics operations in the sector.