India’s food delivery duopoly advanced to a new terrain with SoftBank Group Corp entering the space to lead Swiggy’s $1.25 billion (Rs 9,344 crore) growth round days after primary rival Zomato closed an initial public offering (IPO) on a strong note. SoftBank made the investment from Vision Fund 2.
Swiggy’s existing backer Prosus Ventures co-led the round. Swiggy said in a statement that other new investors who contributed to this funding round were Qatar Investment Authority, Falcon Edge Capital, Amansa Capital, Goldman Sachs, Think Investments and Carmignac. Existing investors Accel and Wellington Management also pooled in capital.
The Bengaluru-based company noted that the fundraise was heavily oversubscribed following strong interest from investors.
Part of this round had already been raised earlier this year in April. At the time, Swiggy was valued at close to $5 billion.
The latest capital infusion will boost Swiggy’s core food delivery business and help build its new food and non-food adjacencies. To achieve this, the startup will invest in technology and artificial intelligence and hire across teams. CEO Sriharsha Majety said the biggest investments will be in its non-food businesses that saw significant growth in the past 15 months during the pandemic.
Swiggy has been aggressively expanding its instant grocery delivery service Instamart and pick-up and drop service Swiggy Genie. It also runs a meat delivery service in key markets and Supr Daily, a daily grocery delivery service, across major Indian cities.
Sumer Juneja, partner, SoftBank Investment Advisers, said that Swiggy has 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.
SoftBank Vision Fund 2, backed by Japanese conglomerate SoftBank Group Corp, has been an active investor in India this year. Its recent bets include enterprise software platform Whatfix, social ecommerce platform Meesho, small and medium enterprise (SME) financing platform OfBusiness, and banking tech startup Zeta.
Owned and operated by Bengaluru-based Bundl Technologies Pvt. Ltd, Swiggy was founded in August 2014 by Majety, Nandan Reddy and Rahul Jaimini. Prior to this funding, it raised Rs 805 crore (about $112.6 million) in a round of funding led by Prosus, the international digital assets arm of South African conglomerate Naspers. Previously, it raised $1 billion at a valuation of $3.3 billion in December 2018.
It competes with Zomato, which became the first unicorn to float an IPO in India. With strong demand from institutional and retail investors, Zomato saw Rs 2.13 lakh crore worth of bids for its IPO that was closed last Friday. The IPO of 71.92 crore shares, excluding the anchor allotment, received bids for 2,751.25 crore shares. The book was covered nearly 38.25 times.
Read: Zomato IPO updates
In 2020, Zomato agreed to acquire ride-hailing company Uber Technologies Inc.'s food delivery business in India -- Uber Eats -- in an all-stock transaction. The deal gave Uber a 9.99% stake in Zomato. The acquisition of Uber Eats marked a big consolidation in the highly competitive and heavily funded food delivery market in India, heralding a two-way race between Zomato and Swiggy.