Food delivery giant Swiggy has closed $1.25 billion fundraise. The funding marks the first investment in the Indian food delivery category by SoftBank Vision Fund 2, with Swiggy’s long-term investor, Prosus, one of the largest technology investors in the world. There is also participation by existing investors, Accel Partners and Wellington Management. In addition, Swiggy has also attracted new investors Qatar Investment Authority, Falcon Edge Capital, Amansa Capital, Goldman Sachs, Think Investments and Carmignac. The investment increases the valuation of the Bengaluru-based startup to $5.5 billion from its previous valuation of $3.6 billion, according to the sources.
This fundraise will give enough firepower to Swiggy to counter competition from rivals such as Zomato, Amazon, Dunzo and Ola Foods. This investment will further accelerate Swiggy’s multi-year strategy of growing its core food delivery business and building new food and non-food adjacencies in 2021 and beyond. To support this, Swiggy will enhance its capabilities in technology and AI, and strengthen teams across engineering, product, data science and analytics as well as in business and supply chain for its newer initiatives.
“The participation of some of the most visionary global investors is a huge vote of confidence in Swiggy’s mission and ability to build an enduring and iconic company out of India,” said Sriharsha Majety, CEO, Swiggy. “The scope of food delivery in India is massive and over the next few years, we will continue to invest aggressively into growing this category. Our biggest investments will be in our non-food businesses that have witnessed tremendous consumer love and growth in a short span, especially in the past 15 months of the pandemic.”
This latest fundraise was heavily oversubscribed following strong interest from investors. It also comes on the back of Swiggy’s rapid recovery from the impacts of Covid-19 and subsequent growth in 2020-21. The order value is 130 per cent of pre-Covid for food category.
With the launch and growth of multiple services in the past year, Swiggy is leading the hyperlocal delivery market in the country. Its instant grocery delivery service, Instamart, is growing rapidly to create the convenience grocery category within India’s massive grocery delivery segment. Swiggy has also expanded its pick-up and drop service, Swiggy Genie, to 65 cities and deepened the presence of its meat delivery service in key markets. Supr Daily, Swiggy’s daily grocery delivery service, present across major Indian cities, is reaching new users every month.
Munish Varma, managing partner, SoftBank Investment Advisers, said SoftBank has successfully backed multiple food delivery platforms globally and seen the value of providing high-quality convenience to consumers. He said Swiggy’s focus on evolving the consumer experience, and its emphasis on relationships with its delivery partners and restaurants, have made it a household brand in India.
“We are excited to partner with Swiggy as they increase their service offerings and daily consumer touchpoints in the rapidly developing digital economy,” said Varma.
Sumer Juneja, partner, SoftBank Investment Advisers said Swiggy’s focus on consumer delight, product innovation, and ecosystem support has made Swiggy a compelling digital experience in India. “They have the railroads in place to empower multiple businesses to reach the new age consumer on a daily basis, and food delivery is just the beginning.”
Swiggy said its strong recovery in food delivery is a result of the hard work of the entire ecosystem of restaurant and delivery partners. To relieve some of the stress of the Covid-19 pandemic, Swiggy launched the Jumpstart program supporting over 50,000 restaurants last year. During the second wave in India, it launched Swiggy Suraksha to offer Covid-19 relief and support to its delivery partners and their families. This includes a 24*7 hotline for leads on medical emergencies, access to doctors for partners and their families, income support, free access to vaccination, and enhanced hospitalisation cover for partners and their families if affected by Covid.
“As a long-term investor in Swiggy, we are continually impressed by the solid business that Swiggy has built, standing out amongst others in India,” said Larry Illg, CEO, Prosus Food. “Swiggy has a steadfast commitment to delivering unparalleled service to consumers, fulfilling their needs across a range of services, while striving to be the most desirable platform for restaurants and delivery partners.”
He said Prosus has one of the most comprehensive views of food delivery globally given the reach of its portfolio and Swiggy continues to exhibit strong execution and has one of the best operational teams in food delivery globally. “We are confident Swiggy is on a path to build one of the most admirable Indian companies, positively affecting the lives of Indian consumers on a daily basis.”
Majety of Swiggy said he believes the next 10-15 years offer a once-in-a-lifetime opportunity for companies like Swiggy as the Indian middle class expands and the firm’s target segment for convenience grows to 500 million users.
“I am confident that we will continue to achieve new growth milestones while holding the responsibility to build a vibrant ecosystem for millions of consumers, as well as our restaurant and delivery partners,” said Majety.
Before starting Swiggy, Majety quit his job as a banker at Nomura, Japan’s largest investment bank, and went on a backpacking trip by bicycle to Portugal, Spain, France, Italy and Greece, peddling 3,200 km. After returning, he founded a logistics platform for online retailers, which he had to shut down. An alumnus of Birla Institute of Technology & Science Pilani, Majety launched Swiggy in Bengaluru’s Koramangala neighbourhood along with his college mate Nandan Reddy and IIT Kharagpur graduate Rahul Jaimini in 2014.