With SoftBank boost, Swiggy eyes growth in non-food business
Food delivery platform Swiggy said it has closed a chunky $1.25-billion funding round led by SoftBank Vision Fund 2 and existing backer Prosus.
The investment raises the valuation of the startup to $5.5 billion from the $3.3 billion it had achieved in its last big funding round in 2018. The funding includes a first tranche of $800 million infused by a clutch of investors which the firm had announced internally in April and a fresh $450 million investment made by SoftBank Vision Fund 2 which is making its first bet in the Indian online food delivery space.
“SoftBank has chosen to back Swiggy for its more formidable non-food delivery play. It is morphing into a convenience app and it is expected that a major chunk of the company’s revenues will come from the non-food delivery segment going forwards,” one of the sources in the know said.
In all, the financial round was backed by Swiggy’s existing investors Accel Partner, Wellington Management and new ones, including Qatar Investment Authority, Falcon Edge Capital, Amansa Capital, Goldman Sachs, Think Investments and Carmignac.
Swiggy’s last big funding round was in December 2018 when it had garnered $1 billion from a set of investors led by Prosus at a valuation of $3.3 billion. The Bengaluru-based startup’s total fund count now stands at around $2.5 billion.
While Swiggy will use a portion of the funds to continue growing its core food delivery business, the bulk of the capital will be deployed to build non-food verticals like grocery in 2021 and beyond. This will entail heavy investments in boosting technology, artificial intelligence (AI) capabilities and hiring skilled talent.
“Our biggest investments will be in our non-food businesses that have witnessed tremendous consumer love and growth in a short span, especially in the past 15 months of the pandemic,” CEO Sriharsha Majety said in a statement. “I believe the next 10-15 years offer a once-in-a-lifetime opportunity for companies like Swiggy as the Indian middle class expands and our target segment for convenience grows to 500 million users,” Majety said.