SoftBank backs food delivery app Swiggy’s US$1.25bil funding


New investors in the round include Qatar Investment Authority, Falcon Edge Capital and Goldman Sachs, while existing backers Accel Partners and Wellington Management also participated, Swiggy said in a statement. (A delivery man working with Swiggy, an online food delivery app, walks through a flooded street in Mumbai, India, Saturday, June 12, 2021. - AP)

BENGALURU: Food delivery startup Swiggy announced it closed a US$1.25bil (RM5.3bil) funding round led by SoftBank Vision Fund 2 and Prosus, just days ahead of rival Zomato Ltd’s listing.

New investors in the round include Qatar Investment Authority, Falcon Edge Capital and Goldman Sachs, while existing backers Accel Partners and Wellington Management also participated, Swiggy said in a statement.

The latest fundraising was heavily oversubscribed following strong interest from investors, the startup said without providing details or its market value. Bloomberg had reported earlier that SoftBank was investing in the company at a US$5.5bil (RM23.23bil) valuation.

Global investors have flocked to India’s nascent startup ecosystem, just as the bulk of the country’s 625 million smartphone users begin to get acquainted with video streaming, food ordering and online shopping.

Last week, Walmart Inc-owned online retailer Flipkart announced a record US$3.6bil (RM15.21bil) funding round, Zomato’s US$1.3bil (RM5.49bil) initial public offering (IPO) drew overwhelming investor interest, while fintech brand Paytm filed documents for what is slated to be India’s largest IPO.

Swiggy said it will use the funds to accelerate growth in food delivery and invest in its instant grocery delivery service Instamart, its on-demand pick-up-and-drop service Genie as well as Supr Daily, which delivers daily essentials on subscription.

India’s convenience market is expected to grow to 500 million users in the next decade, the startup said. “We are super early in Swiggy’s journey,” Sriharsha Majety, the startup’s co-founder and chief executive officer, said in a video conference yesterday. “We have big audacious goals and want to have 100 million transacting users in the next 10 years or sooner.”

The 35-year-old Majety, who said he was shy and preferred not to be the face of the brand, co-founded Swiggy with Nandan Reddy, his classmate from the premier engineering school BITS Pilani. A third founder Rahul Jaimini has since exited. Majety turned to entrepreneurship after a stint as a trader at Nomura in London but the e-commerce logistics that the duo established floundered spectacularly, he recounted.

Then in 2014, they conceived Swiggy as an efficient delivery partner for restaurants and boostrapped the startup with one million rupees (US$13,360 or RM56,439). ― Bloomberg

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