Swiggy raises $1.25 billion from SoftBank, Prosus
Swiggy said it has raised $1.25 billion from investors, including SoftBank and Prosus, nearly matching the funds raised by rival Zomato in an initial public offering (IPO), as the two companies battle to dominate India’s food delivery market.
The fundraising announced on Tuesday valued Swiggy at $5.5 billion, an increase of more than 50% from the $3.6 billion it was valued in April last year, a person familiar with the development said, requesting anonymity.
Existing investors, including Accel Partners and Wellington Management, took part in the fundraising. New investors in the round include Qatar Investment Authority, Falcon Edge Capital, Amansa Capital, Goldman Sachs, Think Investments and Carmignac.
Swiggy’s chief rival Zomato saw its ₹9,375 crore IPO subscribed around 40 times, indicating investor enthusiasm to back the money-losing food delivery startup. The share sale valued Zomato at $8 billion. Other companies that recently completed fundraisings include Flipkart, which raised a record $3.6 billion last week.
“The scope of food delivery in India is massive and, over the next few years, we will continue to invest aggressively into growing this category. Our biggest investments will be in our non-food businesses that have witnessed tremendous growth in a short span,” said Sriharsha Majety, co-founder and chief executive of Swiggy. Earlier this month, the Competition Commission of India (CCI) approved SoftBank’s $450 million investment into Swiggy’s parent Bundl Technologies.
According to Swiggy, the fundraising will help the company execute its multi-year strategy of growing beyond the core food delivery business and build other revenue models.
Over the past year, Swiggy diversified into pick-up-and-drop service, Swiggy Genie, and the e-grocery delivery segment with its Instamart offering. It also operates subscription-based grocery delivery service, SuprDaily.
Swiggy’s new bets into non-food delivery segments has improved investor confidence, leading to the current investment, a second person said, also requesting anonymity.
Through the latest investment, Swiggy will further enhance its capabilities across technology and artificial intelligence while strengthening teams across engineering, product, data science and analytics. It will also utilize the capital to build supply chains for its newer initiatives.
“SoftBank has successfully backed multiple food delivery platforms globally and seen the value of providing high-quality convenience to consumers. Swiggy’s focus on evolving the consumer experience, and its emphasis on relationships with its delivery partners and restaurants, have made it a household brand in India,” said Munish Varma, managing partner, SoftBank Investment Advisers.
On the development, Prosus Food CEO Larry Illg said, “Prosus has one of the most comprehensive views of food delivery globally given the reach of our portfolio and Swiggy continues to exhibit strong execution and has one of the best operational teams in food delivery globally.”
With inputs from PTI