Deal will mark the Masayoshi Son-led firm’s first direct investment in India’s foodtech sector
Last week, Swiggy had raised about ₹5,863 cr from a consortium of new and old investors
SoftBank Vision Fund 2 is expected to invest $450 million in Swiggy in a deal that will mark the Masayoshi Son-led SoftBank Group Corp.’s first direct bet in the foodtech sector in India.
The infusion is part of a larger $1.25 billion round, which has been in the works for the past few months.
SoftBank and Swiggy’s parent Bundl Technologies Pvt. Ltd are still negotiating the finer details of the deal and are yet to sign the shareholder agreement, said a person directly aware of the development, seeking anonymity. The papers are likely to be filed with the Competition Commission of India (CCI) in one or two weeks, this person said.
SoftBank’s entry might push Swiggy’s post-money valuation to $5.5 billion, the person mentioned above said.
The SoftBank Group could invest up to $500 million, said a second person, also requesting anonymity.
When contacted, both SoftBank and Swiggy did not comment.
Last week, Swiggy, in an internal note, had said it had raised $800 million (about ₹5,863 crore) at a post-money valuation of $5 billion from a consortium of new and old investors. Falcon Edge Capital, Goldman Sachs, Think Capital, Amansa Capital and Carmignac were the new investors. Naspers Group’s investment arm Prosus Ventures and Accel Partners also participated in the round.
The company is also expected to raise another tranche from sovereign wealth funds Singapore’s GIC Pvt. Ltd and Qatar Investment Authority (QIA), Mint had reported earlier.
Globally, SoftBank owns around 22% in food delivery firm DoorDash, which went public earlier this year at rich multiples.
SoftBank had invested $680 million in DoorDash, which saw its value rise up to $11.9 billion on the first day of trading.
After the DoorDash listing, the Vision Fund started exploring options to invest in Swiggy and rival Zomato. However, SoftBank founder and chief executive Masayoshi Son preferred Swiggy over Zomato after evaluating the former’s new bouquet of products, the first person mentioned above said.
“SoftBank was aiming to invest in India’s foodtech segment, which continues to grow even during the pandemic. Apart from foodtech, Swiggy has diversified successfully through its grocery delivery service Instamart, building multiple revenue moats and standing out from rival Zomato," said the second person mentioned above.
With Naspers and SoftBank backing Swiggy, the food delivery company will be able to stay private for longer, the first person said.
Although SoftBank chose Swiggy, a senior SoftBank executive, not part of the Vision Fund, had made a small personal investment in Zomato in February, VCCircle had reported. That investment was cleared by SoftBank at that time.
SoftBank had earlier invested in Uber Eats indirectly, via its investment in ride hailing platform Uber. Uber Eats India was sold to Zomato in January 2020.
Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.
Never miss a story! Stay connected and informed with Mint.
our App Now!!