Online food delivery startup Swiggy has raised about $80 Mn Series E funding led by South African Internet and media conglomerate Naspers. Existing investors Accel India, SAIF Partners, Bessemer Venture Partners, Harmony Partners, and Norwest Venture Partners also participated in the round. The current round has pegged Swiggy’s valuation at about $400 Mn.
With this move, Ashutosh Sharma, Head of Investments in India for Naspers, will join the Swiggy Board.
The startup will utilise the newly raised funds for introducing new product and service offerings to enhance customer experience. The startup also announced plans to double its technology headcount and increase investments in core engineering, automation, data sciences, machine learning, and personalisation.
Commenting on the funding, Ashutosh Sharma, Head of Investments in India, Naspers said, “Swiggy has shown impressive growth in a highly competitive market. Naspers was attracted to the company’s exceptional execution in disrupting online food ordering and delivery in India while many players are struggling. Their ability to create a sustainable business, earning consumer trust through a reliable first-party delivery technology, positions them well for success.”
The Swiggy Palate
This investment takes Swiggy’s total funding raised till date to about $155.5 Mn. In September 2016, Swiggy was valued at $200 Mn in its last funding round when it raised $15 Mn (INR 100 Cr) Series D led by US-based venture capital firm Bessemer Venture Partners. Existing investors Accel India, SAIF Partners, and Norwest Venture Partners also participated in this round.
As per a company statement, the startup has witnessed a six-fold growth in revenues over the last year. As per an ET report, the startup posted a 65-fold increase in losses for FY 2015-16 at about $21.2 Mn (INR 137.18 Cr) from about $328K (INR 2.12 Cr) in FY 2014-15.
Commenting on the same, CEO Sriharsha Majety said, “We have seen 35% reduction in delivery costs and recorded 6x growth in revenues last year. We will look at a strong growth year ahead.”
Naspers’ Nest In India
Founded in 1915, Naspers is a global Internet and entertainment group and one of the largest technology investors in the world.
In November 2016, Naspers set up a venture capital arm in India to expedite its investments in the country. The firm also roped in Ashutosh Sharma, formerly a part of Norwest Venture Partners, to lead investments and mergers and acquisitions.
In April 2017, it was reported that Naspers was in talks to pick up a stake in Swiggy. Earlier this month, Naspers invested about $435 Mn in European food takeaway service Delivery Hero. Delivery Hero is the parent company of Swiggy’s competitor Foodpanda India.
A Bird’s Eye View Of The Indian Foodtech Market
As per a sector report by research and advisory firm RedSeer Consulting, online food delivery grew at a staggering pace of 150% to reach $300 Mn in GMV terms in 2016. And the online food delivery players handled, on an average, 160K orders in a day with an average order value of $5.
As per Inc42 Datalabs, 50 startups in the foodtech space raised $152.3 Mn funding. Of the total 105 foodtech startups, 76% were early-stage. Of these, only 24% survived that stage and were able to raise Series A and Series B funding. 2016 saw over 37 shutdowns of foodtech startups.
In May 2017, Uber’s on-demand food delivery app UberEATS debuted in India. It has a three-way app for customers, restaurants, and deliveries. In April 2017, Google launched a new hyperlocal services app in India – Areo. The Areo app delivers food and home services for residents in Bengaluru and Mumbai. Major competitors for Swiggy include Zomato, Runnr, Shadowfax among others.