Buyouts on the menu at food tech startups
BENGALURU: Food delivery startups Swiggy and Zomato are scouting for acquisitions. While Zomato announced the purchase of drone startup Techeagle, Naspers-backed Swiggy is in early talks with several companies for possible buyouts, said two people familiar with the matter.
Investor interest in foodtech companies does not seem to ebb with top players Swiggy and Zomato, and at least three other companies, inching towards closing their next round of fundraising.
Faasos, which closed a $30 million round last month, is looking to raise an additional $100 million to become the “largest restaurant company in the world”, said Faasos CEO Jaydeep Barman in an emailed response to Mint.
Online food ordering startup Foodvista India Pvt. Ltd, which operates Freshmenu, and counts Lightspeed Venture Partners and Zodius Capital as its investors, is in talks to raise $25-30 million from new and existing investors, Mint reported in August. Freshmenu is also in talks for a possible sell-off, according to industry insiders.
Swiggy denied it is in talks for potential takeovers, while Freshmenu did not respond to emailed queries. Swiggy’s talks on potential acquisitions comes months after the Bengaluru-based company acquired on-demand delivery firm Scootsy in August. Strategically, Swiggy is currently focussing on hyperlocal delivery and expansion of its cloudkitchen vertical, said experts.
Swiggy, which has already raised funds twice this year, including a $210 million round in July, is about to close its third round of financing. Rival Zomato, too, is in talks to raise more funds, after securing $200 million in February.
Investors said the emergence of Swiggy and Zomato as the leaders in the food-tech space has provided immense confidence within the investor community to pour more money into some of the top firms. “There is always an early-stage investment euphoria post which certain sector winners emerge,” said Rutvik Doshi, MD at Inventus Capital.