In its largest funding round since inception, food delivery platform Swiggy today said it has raised $1.25 billion from Softbank Vision Fund II, and existing investors Prosus, Accel Partners & Wellington Management. Swiggy is now valued at $5.5 bn.

The funding assumes significance because Swiggy’s main competitor Zomato is all set to get listed on the exchanges in the coming days. It has raised over $1 bn in the past year from a slew of investors, including Tiger Global & Kora Management.

     

Swiggy raises $1.25 bn funding from SoftBank, others to double down on non-food deliveries

WHAT?

In its largest funding round since inception, food delivery platform Swiggy today said it has raised $1.25 billion from Softbank Vision Fund II, and existing investors Prosus, Accel Partners & Wellington Management. Swiggy is now valued at $5.5 bn.

HOW?

The funding round was closed in two tranches-where $800 million (about Rs 5,826 crore) came in from a set of new investors including Falcon Edge, Goldman Sachs, Amansa Capital, Think Investments, and Carmignac, as per an internal mail sent by company founder Sriharsha Majety to employees. The other $450 million investment by SoftBank Vision Fund II.

WHY?

Swiggy will use the funding to expand its online grocery business and inorganic growth by way of M&A deals.

Besides Instamart, Swiggy will double down on other non-food offerings and hyperlocal deliveries like Swiggy Genie which a pickup and drop service in 65 cities; Supr Daily which is a daily grocery service; and a meat delivery service. 

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An initial stock offering by larger rival startup Zomato drew bids worth $46.3 billion as it was more than 38 times oversubscribed last Friday.

At stake is India’s food delivery market, which analysts at Bernstein expect to balloon to be worth $12 billion by 2022, they wrote in a report to clients earlier this year.

A third player, Amazon, also entered the food delivery market in India last year, though its operations are still limited to parts of Bangalore.