If Zomato raised $1.25 billion from its initial public offering (IPO) last week, can its rival Swiggy be far behind? Nobody seems to want to give an inch in India’s food delivery duopoly.
Catching up with its rival Zomato, Swiggy, India’s largest on-demand delivery platform, has raised $1.25 billion or Rs 9375 crore, mirroring a similar amount raised by Zomato from its IPO that closed on July 16.
The latest fundraise values the six-year-old food delivery startup a post-money valuation of $5.5 billion compared to Zomato’s valuation of $8 billion post IPO.
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The funding marks the first investment in the Indian food delivery category by SoftBank Vision Fund 2, with Swiggy’s long-term investor, Prosus, one of the largest technology investors in the world, and with participation by existing investors Accel Partners and Wellington Management.
In addition, Swiggy welcomed new investors Amansa Capital, Carmignac, Falcon Edge Capital, Goldman Sachs, Qatar Investment Authority, and Think Investments.
This latest fundraise was heavily oversubscribed, following strong interest from investors, and comes on the back of Swiggy’s rapid recovery from the impacts of Covid-19 and subsequent growth in 2020-21, said Swiggy in a statement.
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With the launch and growth of multiple services in the past year, Swiggy is leading the hyperlocal delivery market in the country.
Its instant grocery delivery service, Instamart, is growing rapidly to create the convenience grocery category within India’s massive grocery delivery segment.
Swiggy has also expanded its pick-up and drop service, Swiggy Genie, to 65 cities and deepened the presence of its meat delivery service in key markets.
Supr Daily, Swiggy’s daily grocery delivery service, present across major Indian cities, is reaching new users every month.
This investment will further accelerate Swiggy’s multi-year strategy of growing its core food delivery business and building new food and non-food adjacencies in 2021 and beyond.
To support this, Swiggy will enhance its capabilities in technology and AI, and strengthen teams across Engineering, Product, Data Science and Analytics as well as in business and supply chain for its newer initiatives.
Commenting on the deal, Sriharsha Majety, CEO, Swiggy, said, “The participation of some of the most visionary global investors is a huge vote of confidence in Swiggy’s mission and ability to build an enduring and iconic company out of India. 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 consumer love and growth in a short span, especially in the past 15 months of the pandemic.”
Avendus Capital was the financial advisor to Swiggy on the transaction.
“I believe the next 10-15 years offer a once-in-a-lifetime opportunity for companies like Swiggy as the Indian middle class expands and our target segment for convenience grows to 500 million users. I am confident that we will continue to achieve new growth milestones while holding the responsibility to build a vibrant ecosystem for millions of consumers, as well as our restaurant and delivery partners,” he added.