India’s foodtech startup Swiggy has recently received a new fund infusion worth $800 million in a financing round that was led by Falcon Edge Capital, Think Investments, Amansa Capital, Goldman Sachs, and Carmignac according to the company sources.
This mammoth funding has leapfrogged the foodtech unicorn’s valuation to nearly $5 billion. GIC of Singapore and Sovereign Wealth fund Qatar Investment Authority are the new investors to the startup’s cap table are and are also part of the funding round. Participation from the new investors may swell overall investment in Swiggy to almost $1 billion.
The startup had raised $158 million in February 2020 from its largest investor Prosus Ventures which raised its valuation to $3.7 billion.
This fundraising was subscribed heavily due to the strong recovery following the COVID-19 induced disruption. The funding round is not closed as yet and according to company sources, existing investors Prosus and Accel will also participate in the round.
Swiggy’s colossal funding has come at a time when its biggest competition Zomato, a fellow unicorn is solidifying its plans to launch an IPO later this year. Zomato is a food delivery arm of Amazon India Inc. and is backed by Tiger Global and Ant Financial.
Swiggy with this new capital will speed up growth in its present business line and will look for new offerings. The funds from the fresh infusion may flow in multiple tranches as per company sources.
Swiggy has managed to drive a strong recovery in the food delivery segment after the onslaught of the pandemic. According to co-founder Sriharsha Majety, the foodtech plans to relentlessly invent and execute to drive continued growth over the next decade. The next decade offers an opportunity for the company to expand as the convenience delivery segment grows to 500 million users over the period.
The consumer startups in the country are cashing it in as India’s internet user base soars and smartphone users are expected to touch the 1 billion mark in coming years. The COVID-19 pandemic has also been a factor in driving competition in the food delivery segment which is being viewed as a safer option by many than eating out. With the second wave of the pandemic hitting hard in many Indian cities especially metropolis like Mumbai, the segment may witness further growth.
Swiggy headquartered in Bangalore, Karnataka was founded in 2014 by Sriharsha Majety, Rahul Jaimini and, Nandan Reddy. The delivery app brings food from neighborhood restaurants directly to consumers’ door. The Swiggy app lists local restaurants and menu list for users to order and track the delivery. It also offers a pick up and drop off service for a diverse array of items to both retail and business clients.