Now valued at $5.5 billion, with this new funding, Swiggy aims to accelerate growth in food delivery and invest in non-food categories. It expects the total addressable market for convenience to grow to 500 million users in the next decade.
Bengaluru-based foodtech unicornannounced that it has closed $1.25 billion in fundraise by Softbank Vision Fund and existing investor Prosus. This funding is the first investment by Softbank Vision Fund 2 in the Indian foodtech space.
The round also saw participation from existing investors Accel Partners and Wellington Management. In addition, Swiggy welcomed new investors Qatar Investment Authority, Falcon Edge Capital, Amansa Capital, Goldman Sachs, Think Investments and Carmignac. Avendus Capital was the financial advisor to Swiggy on the transaction.
With this funding, Swiggy’s valuation is now at $5.5 billion. It was earlier valued at 3.6 billion.
According to a statement from the company, the fresh 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.
Sriharsha Majety, CEO, Swiggy, said in a press note shared by the company
“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. 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,” he added.
The company stated this fundraise has been oversubscribed following a strong interest from investors. It added that 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.
“I believe 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 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,” Harsha added.
Swiggy launched the Jumpstart programme supporting over 50,000 restaurants last year in an effort to relieve the pandemic stress. During the second wave in India, it launched Swiggy Suraksha to offer COVID-19 relief and support to its delivery partners and their families.
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. 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.”
Swiggy has over 1,50,000 restaurant partners and stores in over 500 cities. Earlier this month, the Competition Commission of India (CCI) had given its nod for a proposed deal involving SoftBank Group entity purchasing a stake in food ordering and delivery platform
The approval by CCI is part of the fundraising plans of Swiggy, where SoftBank is reportedly looking at investing around $450 million at a valuation of $5 billion. SoftBank had put in an application seeking the approval of CCI for this transaction in June this year.
Sumer Juneja, Partner, SoftBank Investment Advisers, added, “From its early days, I have had the privilege to watch Swiggy execute on their vision to become the leader in the convenience economy. Their 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.”
“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. 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. Prosus has one of the most comprehensive views of food delivery globally given the reach of our 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,” said Larry Illg, CEO, Prosus Food.