Weeks after Zomato took over Uber's food mail order business in India, its main competitor collects its own ammunition on site.
Swiggy, India's largest food delivery startup announced Wednesday that it raised $ 113 million through its Series I financing round. Prosus Ventures, the largest venture capital for food delivery startups, led the round.
Meituan Dianping and the Wellington Management Company also participated. The new round valued Swiggy at around $ 3.6 billion, just slightly above the $ 3.3 billion from the previous round, TechCrunch said. The startup has raised approximately $ 1.57 billion to date.
Sriharsha Majety, co-founder and CEO of Swiggy, said the startup will use the fresh capital to invest in "new business areas" such as cloud kitchens and food delivery and to take a "sustainable path to profitability".
Prosus Ventures, Formerly known as Naspers Ventures and Food, Swiggy first wrote a check three years ago. Since then, it has become its largest investor – more than $ 700 million was raised in the startup's $ 1 billion financing round in December 2018 alone.
“Swiggy continues to show strong execution and unwavering commitment to delivering the best service to consumers, and has one of the world's best operational food delivery teams. We are confident that Swiggy will continue to take a prominent place in Indian daily life, ”said Larry Illg, General Manager of Prosus Ventures and Food, in a statement.
The Bangalore-based company, headquartered in Bangalore and operating in 520 cities, saw a 2.5-fold increase in transaction volume last year. The base of the restaurant partners has also grown to 160,000 and more than 10,000 join the platform every month.
Some analysts say that it will be a huge challenge for Swiggy and Zomato. Both spend over $ 20 million a month to attract customers and achieve profitability.
Unlike in industrialized countries like the United States, where the order value of each delivery is around $ 33, a similar item in India bears the price of $ 4.
Anand Lunia, VC at India Quotient, recently said in a podcast that food suppliers had no choice but to continue subsidizing the cost of food on their platform, as most of their customers would otherwise be unable to afford lunch and dinner from them.
The exit from Uber However, the food delivery market in India has made the market a duopoly game, so investors remain optimistic. A $ 4.2 billion chance is at stake, according to research firm Redseer. But Zomato, which raised $ 150 million earlier this year, and Swiggy have already raised more than $ 2.1 billion from the market alone.