Bengaluru-based food delivery platform Swiggy has raised $1Bn (INR 6,995 Cr) funding in a Series H round led by South Africa-based Naspers. With this round, the total funding raised by Swiggy in 2018 has reached $1.31 Bn.
The round saw participation from new investors: Chinese investment firm Tencent, investment management firm Hillhouse Capital and Wellington Management, along with existing investors DST Global, Meituan Dianping and Coatue Management. Since September there have been reports that Japanese conglomerate SoftBank and Tencent may invest in Swiggy.
Swiggy will be using the funds to bring quality food brands onboard and also address the gaps in supply through delivery-only kitchens under the ‘Access’ initiative for restaurant partners, Naspers said. It will also utilise the capital to hire new talent across mid and senior levels with expertise in machine learning and engineering roles. Avendus Capital was the exclusive financial advisor to Swiggy on the transaction.
The foodtech startup, which is reportedly valued at $3.3 Bn, is now looking to strengthen its technology and focus on building the next-generation AI-driven platform for hyperlocal discovery and on-demand delivery.
The four-year-old startup had earlier raised two rounds of funding this year: $100 Mn (INR 699 Cr) led by Naspers and Meituan-Dianping in February and $210 Mn (INR 1,468 Cr) led by Naspers and DST Global in June. Founded in 2014 by Sriharsha Majety, Nandan Reddy, and Rahul Jaimini, Swiggy has over 50,000 restaurant partners in over 50 cities in the country.
Swiggy posted a 220% jump in revenue for FY18. With a stellar performance on the books, the company has also continued to expand its offerings, which include Swiggy Super, Scheduled, Access, long-distance deliveries, and Capital Assist.
According to the foodtech giant, after the last funding round in June, it has expanded its services to 42 cities in the country.
“Our latest round of capital will help to accelerate Swiggy’s journey towards its vision of providing unmatched convenience in food ordering and delivery for Indian consumers,” said Larry Illg, CEO, Food and Ventures, Naspers.
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.
Naspers Growing Interest In Indian Startups
South Africa-based Naspers has doubled down on its investment portfolio in India this year, with the Swiggy investment coming close on the heels of another mammoth investment in edtech unicorn BYJU’s, where it led a $540 Mn (INR 3,782 Cr) Series F funding round. In India, it had also invested in online classifieds platform, OLX; travel platform MakeMyTrip, and payment services provider, PayU.
Recently in September, speculations suggested that ride-hailing company Ola is in talks with Naspers to raise funding at a valuation of $7 Bn-$8 Bn (INR 49,029 Cr – INR 56,033 Cr).
During Naspers CEO Bob van Dijk’s visit to India in September for a three-day company summit, he had said that the company will continue to invest significant amounts of capital in startups working across food delivery, classifieds, and fintech segments in the country.
Earlier in March, Naspers had sold 190 Mn shares in Chinese internet giant Tencent. Post share sale, it has been looking to utilise the gained capital to focus on its investment in India.
What Is Swiggy’s Rival Zomato Upto These Days?
Swiggy’s funding announcement comes at a time when its arch rival Zomato has been facing a lot of criticism across the country after a video went viral showing a delivery person eating food from the boxes that were to be delivered.
After this incident the company said that it will be introducing tamper proof tapes and also take other precautionary measures to avoid such incidents.
Zomato is also looking to expand its online ordering and food delivery services in 30 more cities including Puducherry, Jamshedpur, Ambala, Meerut, Haridwar, Bhavnagar, Ujjain, and Puri among others.
The company has also acquired a Lucknow-based drone delivery startup, TechEagle Innovations, fueling speculations that it may be looking start a drone-based food delivery system in India.