Swiggy, a food aggregation and delivery platform, recently raised $1.25 billion in a two-tranche financing round that closed recently. The startup was valued at nearly $5.5 billion at the conclusion of the fundraiser.
Many new investors led one tranche of the latest financial round, which has also become Swiggy’s largest fundraiser to date, ranging from Falcon Edge and Goldman Sachs to Carmignac, Think Investments and Amansa Capital. Around $800 million was raised as a result of this portion of the fundraiser. The remaining $450 million came from SoftBank Vision Fund II, a massive investment firm. Existing investors Prosus, Wellington Management and Accel Partners, also participated in the same.
Sriharsha Majety, the company’s founder, informed employees via internal email. While the fundraising effort is commendable in and of itself, it takes on added significance in light of competitor Zomato’s recent $1 billion infusion from industry heavyweights such as Tiger Global and Kora Management. The subsequent IPO of Zomato is well documented.
Swiggy has been attempting to diversify its revenue sources in order to not only differentiate itself from Zomato, but also to ensure that it does not solely rely on India’s cutthroat food delivery market. This is due to the fact that the average food order value in India is quite low, making it difficult for companies like Swiggy and Zomato to break even.
Over the last year, the company has introduced new features like Swiggy Genie and Instamart. This has attracted the attention of investors, which is how Swiggy has been able to raise these massive funds despite Zomato’s massively successful IPO.