Tencent leads $34 mn growth round in online food delivery startup Swiggy

Tencent leads $34 mn growth round in online food delivery startup Swiggy
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6 Apr, 2020

Bengaluru headquartered Bundl Technologies, which owns food delivery platform Swiggy, has raised $34 million (around Rs 263 crore at current exchange rates) as part of its ongoing growth funding round.

The round was led by existing investor Tencent Holdings, along with new investors Seoul-headquartered Ark Impact Asset Management; Korea Investment Partners; Samsung Ventures, the investment arm of electronic devices maker Samsung and Mirae Asset Capital Markets. 

The funding is part of Swiggy’s ‘Series I’ round, the first tranche of which was raised in February when Naspers's international e-commerce arm Prosus led a $113 million round into the company. The round saw participation from Beijing-based food delivery platform Meituan Dianping and Massachusetts headquartered investment firm Wellington Management Company.

While Beijing headquartered investment firm Tencent invested $19 million, Mirae Asset Management invested $1.9 million, Ark Impact Asset Management and Korea Investment Partners invested $9.2 million and $4.7 million respectively, regulatory filings showed.

In 2018, Swiggy, in its biggest funding ever, raised $1 billion in a Series H round led by South African technology conglomerate Naspers along with Tencent, Hillhouse Capital and Wellington Management Company. The deal also included a secondary share sale in which RB Investments and Bessemer Venture Partners exited the company while Norwest Venture Partners and Accel sold partial stakes.

So far, Swiggy has raised around $1.35 billion from several investors, VCCEdge data shows.

Swiggy was founded in August 2014 by Sriharsha Majety, Nandan Reddy and Rahul Jaimini. Majety and Reddy are engineers from BITS-Pilani while Jaimini is a graduate from the Indian Institute of Technology, Kharagpur.

Swiggy primarily competes with Alibaba Group-backed Zomato. 

Earlier today, Zomato raised around $5 million from Pacific Horizon Investment Trust, a fund managed by British investment management firm Baillie Gifford. This year, Zomato acquired Uber’s food delivery business in India, Uber Eats India, for $206 million. It paid $35 million in cash and the remainder was paid out in the form of preference shares which converted into a nearly 10% stake for Uber in Zomato. 

The fundraising by both companies comes amid the national lockdown triggered by the Covid-19 pandemic. In the early days, five lakh-odd restaurants had shut dine-in services from March 18 to March 31 but had kept online orders and delivery services by Swiggy and Zomato open.

However, by March 26, Greater Chennai Corporation and states such as Chhattisgarh, Bihar and Assam banned operations of food delivery companies. The lockdown is expected to be lifted on April 14.