Be it Swiggy or PhonePe, there is a loss of thousands of crores, why are these companies not closed?

In the digital world, there are many companies which do internet based work. Such as companies providing cab service, companies providing food or grocery delivery and companies providing different services. These companies, formed in the last few years, remain in the news a lot. Sometimes these companies bring IPO to enter the stock market and sometimes they make huge investments. Despite all this, many famous companies are incurring losses worth thousands of crores. According to a report, startups like Swiggy, Ola, PhonePe and FarmEasy are running at a loss of thousands of crores. Despite this, these companies are continuing their work but are not shutting down.

Most of the e-commerce and digital tech based companies have been working on this model in the last few years. There have also been cases of misuse of funds and due to this, companies like BYJU’s have reached the verge of collapse. It has also been seen many times that the person who started the company earned good profits and later sold his shares and left.

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Big companies are running in losses

If you use the internet and do shopping, payment, ordering food etc. with its help, then you must be knowing the names of companies like Swiggy, Ola, Big Basket, PhonePe and FarmEasy. Inc42 has stated in its recent report that in 2025, all these big companies are facing losses of thousands of crores.

Swiggy is in total loss of Rs 3116 crore, Ola Rs 2276 crore, Big Basket Rs 2006 crore, PhonePe Rs 1727 crore and FarmEasy Rs 1516 crore. Apart from these, Flipkart is running at a loss of Rs 1494 crore, Paytm Rs 663 crore and ATHER Rs 812 crore. Despite this, these companies are continuously expanding and also providing services to their customers.

Why are loss making companies not closed?

In the world of business, it is believed that if a company is spending more on its expansion than its earnings, then it has more chances of being successful. However, if these expenses are not managed properly then companies go bankrupt.

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We understand this from the example of Swiggy. In the financial year ending March 31, 2023, Swiggy earned Rs 5361 crore but its expenditure was Rs 8886 crore. That means there was a loss of Rs 3524 crore. Similarly, in 2024, Swiggy earned a total of Rs 7016 crore and spent Rs 8802 crore i.e. a loss of Rs 1785 crore. If we look at the earnings figures, Swiggy’s earnings increased by more than Rs 1700 crore in a year.

Now the question arises in the minds of people that when the company’s earnings were less then how did it spend more? There can be two ways of doing this. First- The company should take loan from someone. Second- An individual or a venture capitalist should invest in the company. Second case happened with Swiggy. In the year 2023, when the company suffered a loss of Rs 3524 crore, in the same year Swiggy raised funding of $ 700 million i.e. approximately Rs 6300 crore. Similarly, the company raised funding of $ 200 million once and $ 530 million once in 2024.

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In 2025, Swiggy raised about Rs 10 thousand crore through Qualified Institutional Placement (QIP). That means, more than the loss incurred, investment came from somewhere and the company kept expanding.

Why do people invest in loss making companies?

In fact, people who have entered the market with a new business and a new idea assure people that their idea will earn profits in the future. In such a case, there are chances of the invested capital increasing manifold. This is the reason why apart from venture capitalists, common people also invest in such companies. You can see an example of this in the growth of NVIDIA.

A report by Fortune states that those who invested $10,000 in Nvidia shares in 2014, their amount reached $125,796 in 2024. That means more than 12 times in 10 years. This is the condition of the shareholders. Generally, a company enters the market only after achieving good growth and before that only venture capitalists invest money in it. In such a situation, the increase in their share increases manifold. However, the risk in this game is also many times higher.