Swiggy gets $1 bn in fresh funding

BENGALURU: Food delivery company Swiggy, which entered India’s “unicorn” club earlier this year, has raised $1 billion in fresh capital, marking the biggest ever funding round in the country’s booming food-tech sector and increasing pressure on arch-rival Zomato to quickly raise fresh funds.

With the latest funding, which was led by existing investor Naspers Ltd and also saw participation from China’s Tencent Holdings Ltd, Swiggy has become the fifth most valuable startup in the country, commanding a valuation of $3.3 billion and underscoring the stunning rise of a venture that was launched four years ago. Mint reported on September 21 that Swiggy was in talks to raise at least $700 million in fresh funds from Tencent and others.

Of the $1 billion, $800 million will be primary capital or fresh funds. In the latest funding round, existing investors DST Global, China’s Meituan Dianping and Coatue Management also participated. Apart from Tencent, other new investors included the likes of Hillhouse Capital and Wellington Management Co. Swiggy’s valuation surged nearly five times in less than a year, as it was valued at roughly $700 million when it raised $100 million in February from South Africa’s Naspers and others. Avendus Capital advised Swiggy on the latest fundraise.

Swiggy, run by Bundl Technologies Pvt. Ltd, has so far raised roughly $1.27 billion, with a majority of it being raised this year across three separate funding rounds. Existing investors such as Accel Partners and Bessemer Venture Partners have received partial or complete exits for their existing stakes, according to two people aware of the discussions. In total, new investors bought secondary shares worth nearly $200 million from existing shareholders.

In June, a $210 million funding round made Swiggy a unicorn (startups with a valuation of $1 billion or more). Only Paytm (One97 Communications Ltd), Ola (ANI Technologies Pvt. Ltd), Oyo (Oravel Stays Pvt. Ltd) and Byju’s (Think and Learn Pvt. Ltd) are now ahead of Swiggy in valuation. It competes with Zomato, Ubereats and Ola’s Foodpanda.

The fundraise puts more pressure on rival Zomato, which has so far raised more than $400 million and was last valued at $1.1 billion. Zomato is in talks to raise fresh funds, according to three people aware of the discussions.