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Food and grocery delivery platform Swiggy has raised $700 million at a valuation of $10.7 billion, doubling its valuation in six months, even as technology stocks were hammered in the Indian market on January 24.
The investment makes Bengaluru-based Swiggy the fourth decacorn, a privately-held firm valued at $10 billion or more, to emerge from India after fintech Paytm, hotel aggregator Oyo and ed-tech firm Byju’s.
The $700-million round was led by Invesco, with participation from new investors such as Baron Capital Group, Sumeru Venture, IIFL AMC Late Stage Tech Fund, Kotak, Axis Growth Avenues AIF- I, Sixteenth Street Capital, Ghisallo, Smile Group and Segantii Capital, the company said in a release.
Existing investors Alpha Wave Global (formerly Falcon Edge Capital), Qatar Investment Authority, and ARK Impact, along with its long-term investor Prosus, also participated in the round.
In its last funding round in July 2021, Swiggy raised $1.25 billion from SoftBank Vision Fund II, Prosus, Accel and Wellington at a valuation of $5.5 Billion.
Swiggy’s fundraise comes days after Reliance Retail said it led a $240-million round in rival on-demand delivery startup Dunzo, giving India’s largest conglomerate access to rapid delivery, one of the country’s hottest startup themes attracting a bevy of investors.
The quick commerce frenzy has caught wind globally, with startups such as Jokr, Getir, Gorillas, and others promising 10-minute delivery in cities from New York to Turkey to London.
The new round of funding gives Swiggy the ammunition to strengthen its food-delivery business and double down on its express grocery delivery business Instamart, where it competes against Zomato-backed Blinkit, Reliance-backed Dunzo, new upstart Zepto. Flipkart, Amazon, and Tata-owned BigBasket are the other players in the segment.
Also read: Bloodbath in Zomato, PolicyBazaar’s stocks paint Info Edge in deep shade of red
Broadening the bet
The company said it will further strengthen its investments in the broader ecosystem.
“The GMV our food delivery business achieved in 40 months took Instamart just 17 months, demonstrating the platform benefits of Swiggy,” Swiggy CEO Sriharsha Majety said in a statement, referring to gross merchandise value, a key metric to assess the business performance.
“We will double down on this to build more categories in line with our mission of offering unparalleled convenience to Indian consumers,” he said, adding that the larger goal was to make Swiggy the platform that 100 million consumers could use 15 times a month.
Swiggy said in December that it would invest $700 million in Instamart, throwing down the gauntlet amid intense competition.
Instamart, which launched in August 2020, now has more than 2 million transacting users and clocks a million orders a week. Its GMV is poised to hit the $1 billion mark in the next three quarters.
While rival Zomato is focused on its core food-related businesses—from food delivery, dining out to supplies for restaurants—and has taken an investment route to categories such as grocery, Swiggy has chosen to build out its on-demand businesses such as Instamart and Genie, a pick up and drop service, alongside its core food delivery business.
Non-food categories now account for over a fourth of Swiggy’s business volumes, with the number set to grow as it is used at a higher frequency.
The company’s fresh fundraise also signifies the dichotomy in the public and private markets. It raised money at a valuation of $10.7 billion on a day Zomato’s stock got roiled on Indian exchanges, plunging its market cap to $9.78 billion.
The selling in shares of internet companies like Zomato, Paytm, and PolicyBazaar has been triggered by the surge in global and domestic bond yields that has made their valuations richer than what their fundamentals dictate.
A person familiar with the development said Swiggy’s valuation of $10.7 billion was closed weeks ago and it should be pegged against Zomato’s market cap then which hovered between $13 and $15 billion.
The valuation of future funding rounds in startups, however, may see a course correction, as investors turn cautious after a record-breaking funding year.
