Swiggy has raised $100 million, mostly from South African media company Naspers Ltd, in its biggest-ever funding round as India’s largest food delivery start-up seeks to widen its lead in the country’s fast-growing food delivery market.
Chinese internet firm Meituan-Dianping, which runs an online platform for a range of services including food delivery and restaurant bookings, also invested in the latest funding round. Mint couldn’t ascertain Swiggy’s valuation in the latest round.
Swiggy, run by Bengaluru-based Bundl Technologies Pvt. Ltd, plans to use the funds to introduce new products and services and step up investments in its ‘new supply’ business line, a company statement said on Thursday. The company launched ‘Swiggy Access’ in November to help restaurants set up small kitchens to cater solely to online orders in neighbourhoods where they aren’t already present.
Swiggy, which operates in 11 cities including Bengaluru, Delhi, Mumbai, Pune, Hyderabad and Kolkata, claims to have more than 25,000 restaurant partners on its platform. The company clocks anywhere between 120,000 and 150,000 orders a day, far ahead of rivals such as Zomato and Foodpanda India, according to analysts.
Swiggy is one of the few consumer internet start-ups from 2014 that is thriving. Rivals including food-ordering app TinyOwl, grocery-ordering app PepperTap and real estate platform Housing.com have either been shut down or sold in distress deals. Some others, such as Grofers, are struggling to attract new investors and find a workable business model.
Still, competition in the food delivery segment has intensified over the past six months. Uber Eats, the food delivery service of cab-hailing platform Uber, started services in India in August. Following Uber Eats’s entry, rival Ola acquired Foodpanda’s India operations from its German parent Delivery Hero AG in an all-stock deal in December.
Swiggy’s latest fundraising comes just days after rival Zomato raised $200 million from Ant Financial, Alibaba group’s investment arm. Zomato was valued at $1.1 billion while Swiggy was valued at around $400 million in its previous funding round in May last year.
Swiggy will also use the new capital to upgrade its core technology platform, especially in the areas of machine learning and artificial intelligence, as it seeks to build a real-time prediction system to improve customer choice and personalization, and improve the speed, volume and efficiency of food deliveries.
“With this funding, we will further invest in building differentiated offerings, plugging the white spaces in the ecosystem, and developing our technology while keeping superlative customer experience at the core,” said Swiggy chief executive Sriharsha Majety.
Swiggy’s revenue rose six-fold to Rs133 crore in the year ended March 2017, according to the company’s filings with the Registrar of Companies. Its loss, however, widened to Rs205 crore from Rs137 crore a year ago.