Indian meals supply startup Swiggy is chopping about 400 jobs, or almost 7% of its workforce, because the startup seeks to convey additional enhancements to its funds forward of a deliberate IPO later this 12 months.

That is the second spherical of layoff on the Bengaluru-headquartered startup, which reduce simply as many roles early final 12 months.

The transfer comes as Swiggy makes an attempt to additional enhance its funds. Although its meals supply enterprise has been worthwhile for a number of quarters, the startup is just not worthwhile at a bunch degree. Zomato, Swiggy’s chief rival, grew to become worthwhile final 12 months.

Funding bankers and mutual fund traders maintain the view that Swiggy shall be very intently in comparison with Zomato by retail traders on the time of itemizing and must beat the older rival on many metrics if it needs a great valuation.

Swiggy didn’t reply to a request for remark. Indian newspaper ET first reported the layoff.

Zomato and Swiggy lead the Indian meals supply market, however in latest quarters Zomato has expanded its market share lead, in line with UBS and AllianceBernstein. Zomato held over 60% of the Indian meals supply market, primarily based on app consumer rely, AllianceBernstein mentioned in a notice Wednesday.

Knowledge, picture: AllianceBernstein

“Put up covid, Zomato has grown quicker than Swiggy — each from a consumer base & GMV perspective pushed by sturdy execution, wider penetration (Zomato is current in 750+ cities as in comparison with ~600 cities for Swiggy) and stronger content material funnel,” AllianceBernstein analysts wrote.

“Previously three months, Zomato has incrementally gained ~100bps in market share by way of month-to-month lively customers (MAUs). From a GMV perspective, Zomato holds ~54% share in meals supply as in comparison with Swiggy at 46% as of 1HCY23, Zomato’s meals supply GMV stood at $1.7Bn as in comparison with Swiggy’s $1.4Bn. Zomato has been a gainer in Tier 2+ cities in addition to some Tier 1 cities — which has led to the next MAU base for Zomato. Zomato had 58Mn annual transacting customers in CY22, with meals supply section exhibiting18.4Mn MTUs in Q2FY24.”