Zomato, Swiggy look to raise fresh funds

Less than two months after raising capital, both Swiggy and Zomato are in talks to raise more money, as investors queue up to back food-ordering companies, three people familiar with the matter said.

Swiggy (Bundl Technologies Pvt. Ltd) and Zomato Media Pvt. Ltd both have sufficient capital but the two companies are eager to add to their firepower due to strong interest from new investors, the people cited above said on condition of anonymity.

Swiggy and Zomato are in talks with at least three new investors each to raise more capital, the people said. Swiggy may raise as much as $200 million, one of the people said. Zomato may raise anywhere between $200 million and $400 million, the other two people said. The final amount raised by the two companies may change because the talks are at an initial stage.

The Economic Times reported on 28 March that hedge fund Coatue Management, along with others, is in talks to invest $50-100 million in Swiggy.

The people cited above said that Coatue is talking to both Swiggy and Zomato. Mint couldn’t ascertain the identity of the other investors Swiggy and Zomato are talking to.

Swiggy and Zomato didn’t respond to requests for comment.

In early February, Zomato had raised $150 million from Ant Small and Micro Financial Services Group, valuing the food-tech start-up at about $1.1 billion. In the same month, Swiggy raised $100 million from existing investor Naspers Ltd and Meituan-Dianping, which runs an online platform in China offering a range of services including food delivery. Zomato has so far raised $375 million in equity capital while Swiggy has received $255 million, according to Tracxn, a start-up data tracker.

The online food delivery business, which was written off not too long ago, has attracted much investor interest over the past six months. While Zomato and Swiggy have raised large funding rounds, cab-hailing firms Uber and Ola, attracted by the runaway expansion of Swiggy, are investing hundreds of crores of rupees to gain a slice of the market. Ola (ANI Technologies Pvt. Ltd), which had shut its food delivery business Ola Cafe in 2016, re-entered the space by acquiring FoodPanda’s India operations in December.