Even as speculation is rife that Swiggy is looking to invest $100 Mn in its micro-delivery vertical, the company is also looking to raise funding for the next phase of expansion. Swiggy is already looking at 1 lakh daily deliveries in six cities including Bengaluru, Mumbai and Delhi-NCR for orders of daily essentials, but it’s looking to expand this to more cities this year. The company is reportedly in talks with South Korean venture capital funds including the likes of Korea Investment Partners, Mirae Asset Management, STIC Investments and Neoplux for a $500 Mn funding round. Existing investor Naspers will lead the round, which would value Swiggy at around $4 Bn, according to the unconfirmed ET report.
There’s no doubt that the food delivery business involves high cash burn, and both Swiggy and Zomato have been looking at ways to spend less in acquiring repeat customers. The report goes on to say that Swiggy is clocking a million orders a day, and with expansion, it’s looking at sizeable growth in this regard.
Last month, Swiggy was in talks with the Carlyle Group for a $200 Mn funding round, while Japanese investor SoftBank was also reported to be eyeing an investment of around $300 Mn – $500 Mn in the foodtech company. It’s unclear whether SoftBank would participate in the latest round.
Swiggy was founded by Sriharsha Majety, Nandan Reddy, and Rahul Jaimini in 2014. The company claims to have over 2 Lakh delivery partners and more than 1 Lakh restaurant partners spread across 200+ Indian cities.
The food delivery company had posted a 220% jump in its revenue for FY18. According to the company filings, accessed via business intelligence platform Tofler, the company had earned $63.77 Mn in revenue, of which its operational income was $60.22 Mn.
The company had posted an annual net loss of $54.12 Mn in 2017-18, which is a 93% increase in losses from FY17. Company’s advertising and promotional expenses have also increased to $21 Mn from $7.16 Mn the year before.
The company has been diversifying its revenue channels by reducing discounts and bringing in more repeat orders as well as entering new verticals such as Swiggy Pop, Swiggy Daily, Swiggy Super, Swiggy Stores. With the Supr Daily acquisition reported earlier this month, Swiggy will directly compete with startups such as Milkbasket, DailyNinja and Growzip. Milkbasket has recently raised $2.17 Mn debt funding from Innoven Capital to close its ongoing Series B funding round at $12.7 Mn.