Swiggy has raised around $ 800 million in a new round of funding, the Indian grocery delivery startup told employees on Monday as it plans to expand its business in the rural areas after the startup cut its workforce to deal with the pandemic.
First in an email to the employees reported Times of India journalist Digbijay Mishra, Swiggy co-founder and CEO Sriharsha Majety, said the startup had around $ 800 million from new investors including Falcon Edge Capital, Goldman Sachs, Think Capital, Amansa Capital and Carmignac, as well as the existing ones Investors applied to Prosus Ventures and Accel.
“This fundraiser gives us a lot more firepower than the planned investments for our current businesses. Given our unqualified ambitions, we will continue to develop new offerings for the future that may be ready for investment later. We must now tirelessly invent and execute for the next few years to build a permanent cult company out of India, ”Majety wrote in the Biomedarticles email.
Majety did not announce the new valuation of Swiggy, but said the new round of funding was “deeply drawn given the very positive investor sentiment towards Swiggy.” According to someone familiar with the matter, Swiggy was worth over $ 4.9 billion in the new round. The startup has now raised around $ 2.2 billion.
Swiggy had raised $ 157 million last year, valued at around $ 3.7 billion. That investment is not part of the new round, a person familiar with the matter told Biomedarticles.
He said the startup’s long-term goal, which competes with heavily backed Zomato and newcomer Amazon, is to serve 500 million users over the next 10 to 15 years, pointing to Chinese food giant Meituan, which had 500 million transactional users in the last year and is valued at over $ 100 billion.
“We went through a very difficult period with Covid last year and weathered the storm, but everything we do from now on must maximize the chances of long-term success,” wrote Majety.
Swiggy eliminated some jobs last year – as did Zomato – and scaled back its efforts in the cloud kitchen when it tried to stay afloat during the pandemic that led New Delhi to enforce a month-long lockdown.
The announcement on Monday comes amid Zomato, which has raised $ 910 million over the past few months as the Gurgaon-based company prepares for an IPO this year. The last investment tranche valued Zomato at $ 5.4 billion. During its fundraiser, Zomato said it raised funds in part to “fend off mischief or price wars from our competitors in various areas of our business.”
A third vendor, Amazon, also entered the Indian grocery delivery market last year, though its business is still limited to parts of Bangalore.
At stake is the Indian grocery delivery market, which Bernstein analysts expect to be valued at $ 12 billion by 2022, they wrote in a report to customers earlier this year. Zomato is currently the market leader with a market share of around 50%, wrote Bernstein analysts.
“We believe that the food technology industry in India is well positioned to grow sustainably with an improvement in the unit economy. Take rates are one of the highest in India at 20-25% and consumer traction is increasing. The market is largely a duopoly between Zomato and Swiggy with a share of over 80%, ”Bank of America analysts wrote in a report recently audited by Biomedarticles.