Global Statistics

All countries
224,746,832
Confirmed
Updated on 11/09/2021 10:29 am
All countries
199,577,183
Recovered
Updated on 11/09/2021 10:29 am
All countries
4,632,649
Deaths
Updated on 11/09/2021 10:29 am

Global Statistics

All countries
224,746,832
Confirmed
Updated on 11/09/2021 10:29 am
All countries
199,577,183
Recovered
Updated on 11/09/2021 10:29 am
All countries
4,632,649
Deaths
Updated on 11/09/2021 10:29 am

More on the plate: new increase puts Swiggy’s valuation at $ 5.5 billion

The company claimed that its Supr Daily daily grocery delivery service, which operates in major cities in India, is reaching new users every month.

Food delivery platform Swiggy said Tuesday it closed a major $ 1.25 billion funding round led by SoftBank Vision Fund 2 and existing backer Prosus. The investment raises the startup’s valuation to $ 5.5 billion from the $ 3.3 billion it had made in its last major funding round in 2018.

The financing includes a first tranche of $ 800 million infused by a group of investors that the company had announced internally in April and a new investment of $ 450 million made by SoftBank Vision Fund 2, which is making its first bet in the Indian space of online food delivery. .

“SoftBank has chosen to endorse Swiggy for its formidable non-food delivery game. It is being transformed into a convenience application and a significant portion of the company’s revenue is expected to come from the non-food delivery segment in the future, ”said one of the informed sources.

In total, the financial round was supported by existing investors from Swiggy, Accel Partner, Wellington Management and a host of new investors, including Qatar Investment Authority, Falcon Edge Capital, Amansa Capital, Goldman Sachs, Think Investments and Carmignac.

Swiggy’s last big round of funding was in December 2018, when it raised $ 1 billion from a pool of investors led by Prosus with a valuation of $ 3.3 billion. The Bengaluru-based company’s total fund count is now around $ 2.5 billion.

While Swiggy will use a portion of the funds to continue growing its core food delivery business, the majority of the capital will be used to build non-food verticals such as groceries in 2021 and beyond. This will involve large investments to drive technology, artificial intelligence (AI) capabilities, and hiring skilled talent.

“Our largest investments will be in our non-food businesses that have witnessed tremendous love and growth from consumers in a short period of time, especially in the last 15 months of the pandemic,” Executive Director Sriharsha Majety said in a statement. . “I believe that the next 10-15 years offer a once-in-a-lifetime opportunity for companies like Swiggy as the Indian middle class expands and our target convenience segment grows to 500 million users,” Majety said.

Swiggy’s instant grocery delivery service Instamart is focused on creating the convenience grocery category. The seven-year-old startup has also expanded its pickup and delivery service, Swiggy Genie, to 65 cities and deepened the presence of its meat delivery service in key markets. The company claimed that its Supr Daily daily grocery delivery service, which operates in major cities in India, is reaching new users every month.

There are many last-mile value propositions in India that remain largely untapped: categories such as groceries, household essentials, janitorial services, pharmaceuticals, documents, gifts, and cakes, among others. The market for these types of last mile deliveries is huge. “What Swiggy is saying is can I use my delivery fleet and can I drive multiple use cases in that delivery fleet? Unlike Zomato, which offers other services like restaurant listings, Swiggy has focused on being more of a last-mile and logistics player, ”said Aryaman Tandon, managing partner and co-founder of the Praxis Global Alliance. In addition, the food delivery business has become profitable from an operational point of view thanks to the growth led by Covid; Average ticket sizes have increased, customer repeat rates have improved, and there is no need for aggressive discounts. “Non-food products are a naturally grown adjacency because whatever you do has a huge impact on your bottom line,” Tandon said.

Rival Zomato, which launched its 9,375 crore initial public offering (IPO) last week, is also looking for new business and has recently invested in electronic grocery company Grofers. Zomato also plans to roll out online grocery services to the app soon.

Investor appetite for the Indian online food delivery space has multiplied as the pandemic fueled demand for online food ordering. Analysts at Kotak Institutional Equities estimate that the gross merchandise value (GMV) of the online food delivery industry will increase to $ 9 billion in fiscal year 25 and more to $ 27 billion by fiscal year 30 from a $ 3 billion projection in fiscal 2020 thanks to Covid-led growth. . The segment that has around 15 million users in transactions today is expected to expand its customer base to 80 million in the future.

Swiggy, which leads the food technology space with Zomato, connects consumers with more than 1.50,000 restaurant and store partners in more than 500 cities. “Swiggy’s focus on evolving the consumer experience and its emphasis on relationships with its restaurant and delivery partners have made it a household brand in India,” said Munish Varma, managing partner at SoftBank Investment Advisers.

“They have the railroads in place to allow multiple businesses to reach the new age consumer on a daily basis, and food delivery is just the beginning,” said Sumer Juneja, partner at SoftBank Investment Advisers.

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