Food delivery giant Swiggy has raised USD 800 million in a round led by Falcon Edge, Think Investments, Carmignac, Amansa Capital, and Goldman Sachs, as its arch rival Zomato prepares to go public this year.
The latest funding has boosted the Bengaluru-based startup’s valuation to almost USD 5 billion from USD 3.7 billion in February last year when it raised a USD 158 million round, local media reports said citing sources.
In an internal memo sent to employees, company founder Sriharsha Majety said existing backers, Prosus (formerly Naspers), which is its largest shareholder, and Accel will also chip in the round.
Sovereign wealth funds Singapore’s GIC and Doha-headquartered Qatar Investment Authority are also expected to join the ongoing round at a later stage, post which Swiggy is expected to close the fundraise, a report by local media Mint said.
“Over the last one year, thanks to all your efforts, we’ve managed to drive a strong recovery in the food delivery business with a very clear path to profitability,” Majety said. “The food delivery business is the strongest it has ever been, and we are now well on our way to drive continued growth over the next decade.”
The funding comes at a time when the food delivery sector is still recovering from the affects of last year’s lockdown when many restaurants remained shut. While by the latter half of the year restaurants opened up giving the much needed boost to the sector, a person close to the daily operations at Swiggy told KrASIA that the number of orders have not reached pre-COVID-19 level.
According to Majety, the fundraise was oversubscribed. “The fundraise gives us a lot more firepower than the planned investments for our current business lines. Given our unfettered ambition though, we will continue to seed/experiment new offerings for the future that may be ready for investments later,” Majety wrote.
He said that over the next few quarters, “between the offerings that are scaling fast now and the pipeline we have, our vision for unparalleled convenience will come to life in a very big way.”
Just like Chinese on-demand services giant Meituan, which came on Swiggy’s cap table in 2018, Majety believes that Swiggy can become an iconic company with 500 million users over the next 10-15 years.
Zomato, on its part, has reportedly raised USD 500 million in a pre-IPO round, through a mix of primary and secondary capital, and the deal has valued the company at USD 5.5 billion. The Gurugram-headquartered company is eyeing to grab USD 750 million to USD 1 billion in capital during its IPO at a valuation of USD 6-8 billion, as per local media.