Foodtech platform Swiggy, operated by Bundl Technologies Pvt Ltd, has raised $700 million in a funding round led by Invesco, the company said in a statement on Monday. The fundraise values Swiggy at $10.7 billion, which is double its last valuation in July, according to a person with knowledge of the matter.
Other investors including 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 also participated in the round.
Its existing investors Alpha Wave Global (formerly Falcon Edge Capital), Qatar Investment Authority, and ARK Impact, along with its long-term investor Prosus also participated, the company said.
Swiggy’s fundraise and valuation boost comes at a time when rival Zomato, which got listed last year, has seen its market capitalisation erode rapidly. Zomato, which had an issue price of Rs 76 a piece, had seen a blockbuster stock market debut in July 2021. The stock had even hit an all-time intraday high of Rs 169 in November. However, the stock has fallen nearly 50% since then. On Monday, the stock ended 20% down and ended below Rs 100 a share for the first time ever. Zomato’s market capitalisation, as of Monday, was down to almost Rs 71,944 crore ($9.64 billion), on the Bombay Stock Exchange.
Other new-age technology companies, which got listed last year, have also seen their share prices fall sharply off late. Shares of FSN E-Commerce, which owns and operates online beauty and cosmetics retailer Nykaa, have fallen over 30% from its all-time high. On Monday, the stock closed at Rs 1735.95 a piece, its lowest closing price till date. Paytm, meanwhile, operated by One97 Communications, has been the worst hit, as the stock has fallen over 55% from its issue price of Rs 2,150 a piece. On Monday, the stock ended at Rs 917.45 a share.
Swiggy’s latest fundraise follows the firm raising $1.25 billion from investors including SoftBank and Prosus in July 2021 at a valuation of $5.5 billion, a 50% jump from the $3.6 billion it was valued in April last year.
VCCircle reported in December, that Swiggy was nearing a $700 million fundraise at a valuation of more than $10 billion. In an interview with VCCircle in December, Majety had said that the company would look to diversify from the core food delivery business.
The company said it plans to use the funds to accelerate growth on its core platform and make investments in Instamart, Swiggy’s quick commerce platform grocery platform. Instamart will be reaching an annualised gross merchandise value (GMV) run rate of $1 billion in the next three quarters, Swiggy said.
“The GMV our food delivery business achieved in 40 months, took Instamart just 17 months, demonstrating the platform benefits of Swiggy. We will double down on this to build more categories in line with our mission of offering unparalleled convenience to Indian consumers,” said Sriharsha Majety, Chief Executive Officer, Swiggy.
In December, Swiggy had said that it will be investing $700 million in its express grocery delivery service Instamart.
In the last few months, Swiggy has expanded Instamart to 19 cities, and has optimised the delivery time, Swiggy said. Swiggy Genie, Swiggy’s pick up and drop service is currently present in 68 cities, while the company’s meat delivery service, and daily grocery service, Supr Daily are present across all major Indian cities, Swiggy said. Swiggy also had launched Swiggy One, a membership program with benefits across food, groceries, and other on-demand services by Swiggy.
The company said it will also further invest more in the broader ecosystem. Swiggy said that the food delivery business has nearly doubled in gross value over the last year.
“Our goal is to make Swiggy the platform that 100 million consumers can use 15 times a month. We will continue to invest in our people, products, and partners to create a positive impact on the ecosystem and accelerate the digital transformation in food and grocery delivery and other on-demand services,” Majety said. Many shareholders have raised concerns over profitability of these companies. However, Majety was confident about Swiggy’s food delivery business turning profitable soon.
“We will see the food delivery category to be profitable in the next two to three years,” Majety had recently told VCCircle.
Avendus Capital advised Swiggy on the transaction.
