Unicorns Swiggy and Zomato have been battling it out for a bigger piece of the Indian foodtech pie even as fund infusions from major investors continue to bolster the war.
After reports surfaced that Japanese conglomerate SoftBank is exploring investments in either of these foodtech leaders, Tencent has now joined the race to invest $500-700 Mn in Swiggy.
Reports cited people familiar with the development as claiming that Tencent wants to contribute a significant portion in the next funding round in Swiggy, which will value the company at $2.5-3 Bn.
Tencent was reportedly planning to co-invest in Swiggy in an earlier round along with SoftBank, apart from pouring an additional $50 Mn funding in the startup. This would have taken Tencent’s proposed investment in the startup to around $100 Mn.
The industry is abuzz with the reports that Swiggy is all set to capture a larger share of the delivery pie by extending its services across the entire hyperlocal delivery market.
Reports have also surfaced that Swiggy is looking to raise its next round of funding from investors such as SoftBank, growth equity firm General Atlantic and some Chinese hedge funds including Tybourne Capital and Hillhouse Capital.
If SoftBank bets on Swiggy — it is expected to invest $500 Mn in the startup — the latter will be valued at more than $2 Bn, a 54% jump from its recently achieved unicorn status at a valuation of $1.3 Bn.
Swiggy was also looking for a $400 Mn funding recently after it saw a 45% year-on-year growth on a revenue of $74 Mn in FY 18.
SoftBank’s proposed investment in Swiggy has been under discussion for almost a year, but no result was seen in Swiggy’s last two funding rounds. If the talks result in a deal this time, SoftBank may become Swiggy’s largest shareholder.
Here’s a quick update on all that’s happening at Swiggy:
- Swiggy has a network of 40,000 restaurant partners spread across 17 cities
- It has launched a slew of new initiatives including Swiggy Access, long-distance deliveries, and Capital Assist
- It launched Swiggy Super to help restaurants serve consumers in new and more powerful ways as well as to increase its user base
- The company is working to foray into the hyperlocal vertical with a campaign called Dash, particularly in the medicine and grocery categories
- Swiggy’s ‘Scheduled’ feature enables users to plan and order their meals for lunch, dinner, breakfast, or party menus in advance
- It acquired on-demand delivery platform Scootsy, which will continue to operate as an independent app post the acquisition
- Swiggy also secured $210 Mn in a Series G funding led by existing investor Naspers and new investor DST Global
According to a study by Netscribes Research, the online food delivery segment in India is expected to expand by 34%-36% between 2015 and 2020.
Even as Zomato and Swiggy vie for greater customer acquisition, the food delivery segment is witnessing increasing competition with the entry of global players such as UberEATS and Google Areo. And it will surely help Swiggy to get a big funds infusion at such a time.