[Funding Alert] Foodtech Wars Intensifies As Unicorn Swiggy Raises Funding At About $3.3 Billion Valuation
Swiggy has raised $113 million in a funding round led by its existing investor and South African Internet giant, Naspers
The foodtech industry has been witnessing several developments in 2020 fuelling the competition among the giants. A month after Zomato acquired UberEats, Swiggy has raised $113 million as part of its Series I funding round led by its existing investor Prosus N.V., the internet assets division South African giant Naspers. This round will reportedly increase Swiggy’s valuation to about $3.3 billion.
Other existing investors such as Meituan Dianping and Wellington Management Company also participated in the round, however, Naspers led the round with $100 million investment.
Naspers will now reportedly own about 40.56 per cent equity, Meituan will own about 6.35 per cent while Wellington Management hold little over 1 per cent stake in the Bengaluru-based food tech giant
In an official statement, Swiggy said that the funds will be used to further develop its new lines of business, addressing visible gaps in the market. The company will continue to invest in new growth areas (Stores, Go and SuprDaily) as it delivers on its promise of bringing unparalleled convenience to the lives of urban consumers.
“We are laser focused on continuing to execute on our vision while building a sustainable path to profitability,” Sriharsha Majety, CEO and co-founder of Swiggy, said in a statement.
Zomato VS Swiggy: Race To The Top In Foodtech Space
According to DataLabs report by Inc42, the Indian online food delivery space is expected to become a $12.53 billion market by 2023. As per industry estimates, currently foodtech giants Zomato and Swiggy together account for nearly 90 per cent of the market share. Swiggy leads with 48 per cent market share, followed by Zomato with about 42 per cent share.
A week prior to this development, Swiggy had announced the launch of its new initiative named 'BrandWorks' aimed at co-creating delivery brands with its restaurant partners. According to Swiggy, its transaction numbers grew nearly 2.5 times last year. The restaurant partner base has also grown 4 times to over 1.6 lakh partners with over 10,000 new restaurants being added every month. The company claims to have over 250,000 delivery partners across 520 cities.
Swiggy’s fundraise comes in a one month after Zomato acquired Uber’s foodtech arm for $350 million (INR 2,485 crore). Prior to this, Zomato had raised $150 million funding from Alibaba affiliate Chinese investor Ant Financial at a $3 billion valuation.
Zomato had said that following this deal, Uber Eats in India will discontinue operations and will not exist as a separate brand and users are being redirected to the Zomato app. According to reports, UberEats was placed at the third spot in the food delivery market in India after Swiggy and Zomato. This acquisition deal will change the dynamics as it will give a major boost to Zomato’s user base.
Focus On Foodtech Space
While foodtech giants are stepping up their game to claim the top position, other technology companies are also eyeing the growing segment. In October 2019, media reports revealed that e-commerce giant Amazon is planning to foray into the cloud kitchen segment and launch private food brands in Bengaluru.
Amazon may reportedly launch its pilot under Amazon Restaurants brand. This business will be managed by Prione Business Services, a joint venture between Amazon and Catamaran Ventures.
In February 2019, reports revealed that OYO forayed into foodtech and launched over 20 cloud kitchens in Gurugram and Bengaluru.