As its archrival Zomato battles an ideological controversy, food delivery unicorn Swiggy is reportedly close to raising a $700-$750 Mn funding round led by its existing investor Naspers.
According to a media report which cited two sources close to the development, Naspers will be investing around $350 Mn along with a group of Korean investors such as STIC Investments and Korean Omega Investment who are said to co-invest about $50 Mn. While, the rest is said to be raised from the other existing investors of Swiggy.
The report further noted that a total commitment of $540 Mn has been received by the food delivery company and if existing or new investors don’t agree to invest the remaining amount, Naspers might be infusing more funds in this round.
An Inc42 query to Swiggy did not elicit a response till the time of publication.
This new round will reportedly increase Swiggy’s valuation to around $4 Bn. The food delivery major has been speculated to raise a $500 Mn funding round for over two months now.
Earlier in June, the reports said that Japanese conglomerate SoftBank will be leading the company’s $500 Mn round. Later, Carlyle Group was also reported to have participated in $200 Mn investment talks with Swiggy.
Also recently, South Korean venture capital funds such as Korea Investment Partners, Mirae Asset Management, STIC Investments and Neoplux were said to be participating in the much talked about $500 Mn funding round.
According to Swiggy, till now it has raised a total of $1.26 Bn in funding. Some of the existing investors in the company include Naspers, DST Global, Meituan-Dianping, Accel Partners and Saif Partners.
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. Earlier this year, the company had also invested $4.39 Mn in the Mumbai-based foodtech startup Fingerlix.
Earlier this month, it was also reported to have acquired a subscription-based daily consumable goods delivery startup Supr Daily in 2018. However, there is no official confirmation about the acquisition till now.
Morgan Stanley has estimated the online food and grocery segment to become the fastest-growing segments in India, expanding at a CAGR of 141% by 2020 and contributing $15 Bn or 12.5% of overall online retail sales.
RedSeer’s June updates on the food delivery market have noted an increase in adoption of delivery services in non-metro Indian cities. Food deliveries in non-metro cities have grown 7x faster quarter-on-quarter as compared to metro cities (80% growth vs 12%).
The report attributed this growth to a combination of smart promos, the growing selection of restaurants and increasing comfort with foodtech usage.