SoftBank likely to invest $450m in Indian food-tech unicorn Swiggy

SoftBank Vision Fund 2 is expected to invest $450 million in Swiggy in a deal that will mark the Masayoshi Son-led SoftBank Group Corp.’s first direct bet in the foodtech sector in India.

The infusion is part of a larger $1.25 billion round, which has been in the works for the past few months.

SoftBank and Swiggy’s parent Bundl Technologies Pvt. Ltd are still negotiating the finer details of the deal and are yet to sign the shareholder agreement, said a person directly aware of the development, seeking anonymity. The papers are likely to be filed with the Competition Commission of India (CCI) in one or two weeks, this person said.

SoftBank’s entry might push Swiggy’s post-money valuation to $5.5 billion, the person mentioned above said.

The SoftBank Group could invest up to $500 million, said a second person, also requesting anonymity.

When contacted, both SoftBank and Swiggy did not comment.

Last week, Swiggy, in an internal note, had said it had raised $800 million (about 5,863 crore) at a post-money valuation of $5 billion from a consortium of new and old investors. Falcon Edge Capital, Goldman Sachs, Think Capital, Amansa Capital and Carmignac were the new investors. Naspers Group’s investment arm Prosus Ventures and Accel Partners also participated in the round.

The company is also expected to raise another tranche from sovereign wealth funds Singapore’s GIC Pvt. Ltd and Qatar Investment Authority (QIA), Mint had reported earlier.

Globally, SoftBank owns around 22% in food delivery firm DoorDash, which went public earlier this year at rich multiples.

SoftBank had invested $680 million in DoorDash, which saw its value rise up to $11.9 billion on the first day of trading.

After the DoorDash listing, the Vision Fund started exploring options to invest in Swiggy and rival Zomato. However, SoftBank founder and chief executive Masayoshi Son preferred Swiggy over Zomato after evaluating the former’s new bouquet of products, the first person mentioned above said.

“SoftBank was aiming to invest in India’s foodtech segment, which continues to grow even during the pandemic. Apart from foodtech, Swiggy has diversified successfully through its grocery delivery service Instamart, building multiple revenue moats and standing out from rival Zomato,” said the second person mentioned above.

With Naspers and SoftBank backing Swiggy, the food delivery company will be able to stay private for longer, the first person said.

Although SoftBank chose Swiggy, a senior SoftBank executive, not part of the Vision Fund, had made a small personal investment in Zomato in February, VCCircle had reported. That investment was cleared by SoftBank at that time.

SoftBank had earlier invested in Uber Eats indirectly, via its investment in ride hailing platform Uber. Uber Eats India was sold to Zomato in January 2020.

The article was first published on livemint.com

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.