Food tech startup, Swiggy on Tuesday announced the close of its latest Series J fundraise at $1.25 billion led by SoftBank Vision Fund 2, and its long-term investor, Prosus.
Post the funding, Swiggy is expected to be valued at $5.5 billion, up from $3.6 billion as of April 2020, said a person requesting anonymity.
The current fundraise also saw participation from existing investors including Accel Partners and Wellington Management.
In addition, new investors including Qatar Investment Authority, Falcon Edge Capital, Amansa Capital, Goldman Sachs, Think Investments and Carmignac also participated as a part of the round.
Earlier this month, the market watchdog Competition Commission of India (CCI) approved Softbank’s $450 million investment into Swiggy’s parent Bundl Technologies.
“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 growth in a short span,” said Sriharsha Majety, chief executive officer (CEO), Swiggy.
The fundraise for the Bengaluru-based food tech major comes at a time when competitor Zomato Ltd. ventured to list on domestic exchanges, with its initial public offering (IPO) being subscribed more than 40.4 times on the last day of public issue.
Zomato had set out to raise ₹9375 crore as a part of its recent public listing.
Over the course of last year, Swiggy has diversified its bets through its pick-up and drop service, Swiggy Genie and entered into the e-grocery delivery segment with its Instamart offering. It also operates its subscription-based micro-grocery delivery service, SuprDaily, which it reportedly acquired in 2018.
Swiggy’s bets to diversify its offerings into non-food delivery segments has raised its confidence with investors, leading to the current investment, said a second individual aware of the fundraising discussions.
At present, it has expanded its Instamart service to Benglauru and Gurugram, as it looks to touch upon newer geographies with its e-grocery offering. It has also scaled Swiggy Genie to 65 cities and deepened the presence of its meat delivery service in key markets.
Earlier this month, arch-rival Zomato also said that it will be re-launching grocery deliveries on its platform, after making a $100 million investment in e-grocer, Grofers.
Through the 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 utilise the capital to build supply chains for its newer initiatives.
This latest fundraise was heavily oversubscribed following strong interest from investors, said the company in a statement.
“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. We are excited to partner with Swiggy as they increase their service offerings and daily consumer touchpoints in the rapidly developing digital economy,” said Munish Varma, managing partner, SoftBank Investment Advisers.
Softbank Vision Fund’s other food tech and e-grocery bets globally include – cloud kitchen operator, Kitopi; meat harvesting startup, UPSIDE Foods, fresh produce e-grocer, Oda, and restaurant solution, Ordermark.
“Swiggy has a steadfast commitment to delivering unparalleled service to consumers, fulfilling their needs across a range of services, while striving to be the most desirable platform for restaurants and delivery partners,” said Larry Illg, CEO, Prosus Food.
Avendus Capital was the advisor to Swiggy on the current transaction.
Online food delivery was one of the most impacted sectors from the onslaught of the covid-pandemic. However, it has recovered completely with volumes inching higher than pre-covid levels, according to industry estimates.
This article was first published on livemint.