Swiggy may raise up to $700 mn to finance new biz
MUMBAI/BENGALURU: India’s largest food delivery service Swiggy, which is currently in talks to raise up to $700 million from new investors such as Tencent, plans to use the fresh funds to enter new businesses and areas especially in the hyperlocal delivery space, according to three people aware of the discussions.
Swiggy, which raised funds earlier this year at a valuation of about $1.3 billion, may see its valuation nearly double to at least $2.5 billion, said the people mentioned above.
Mint first reported on August 3 that Swiggy was in talks to raise fresh funds amounting to at least $500 million and that it had held talks with SoftBank. However, SoftBank is currently more likely to invest in Zomato, and the talks with Swiggy have fallen through, said the people mentioned above, all of whom spoke under condition of anonymity.
Swiggy’s plans to ramp up and enter new areas have intensified over the past six months and has drawn comparisons to the playbook adopted by Chinese food delivery giant Meituan Dianping, which over the years diversified and entered a number of new hyperlocal delivery businesses. Meituan also happens to be an existing investor in Swiggy.
To expand into hyperlocal delivery, Swiggy is following a hybrid approach—while it is building some of these capabilities from scratch inside the company, it is also aggressively looking to partner with or buy out emerging startups in the hyperlocal space, the people mentioned above said. For instance, a few weeks ago, Swiggy bought out milk delivery startup Suprdaily, signalling its intentions to enter the online grocery delivery space, which is currently dominated by the likes of BigBasket. In August, Swiggy also bought Mumbaibased Scootsy, which delivers restaurant and gourmet food, toys, beauty, electronics and other products.
Swiggy did not reply immediately to an email seeking comment, but in an interview in August, its co-founder and CEO Sriharsha Majety had indicated that the food delivery startup will be experimenting with a bunch of new offerings over the coming months.
“We are experimenting with some such (hyperlocal) categories,” Majety told Mint in August. “We’ve been closely observing our consumers’ lives and we feel that there are some unique capabilities that we have that can take a shot at solving more problems, even outside the realm of food. You’ll see us start making small forays into new areas.”