Swiggy raises $112 mn funding led by Naspers from existing investors

Bundl Technologies, the parent company of food delivery firm Swiggy has raised $112 million from existing investors including South African conglomerate Naspers. The other investors include - Hadley Harbour Master Investors and Inspired Elite Investments.

With the current investment, Naspers continues to remain the largest shareholder in Swiggy, with a holding of 40.56 per cent on a fully-diluted basis, according to the regulatory documents filed by Swiggy, which were sourced from business signals platform Paper.vc.

“This investment is part of Swiggy’s plan to raise up to $1 billion for its food delivery and cloud kitchens business. There have been reports of SoftBank looking to invest in Swiggy, but that has not happened yet,” said Sonia Pradhan, Founder, Paper.vc.

“Swiggy is currently locked in a battle for market share with Zomato and a bunch of smaller, rapidly growing cloud kitchens businesses such as Box8 and Rebel Foods,” she added.

Swiggy’s valuation is learnt to have remained largely the same level of around $3.3 billion when it raised its previous $1 billion funding round in December 2018. This round too was led by Naspers, along with investors such as China’s Tencent, Hillhouse Capital and Wellington Management Company. According to Paper.vc's calculations, Swiggy's post-money valuation for the on-going round of funding is $3.4 billion.

The fresh funding comes a few weeks after the Bengaluru-based company’s rival Zomato bought ride-hailing firm Uber’s food delivery business in India in an all-stock deal. According to analysts, the value of the deal was in the region of $350-400 million.

Profitability has been the biggest challenge for food delivery firms. Swiggy reported a net loss of Rs 2,346 crore for the financial year 2018-19, an increase of over five-times over the last financial year, according to data platform Tofler. Even though the company’s revenue had gone up 183 times to Rs 1,292 crore, its total expenses for the fiscal remained high at Rs 3,638 crore which was attributed to multifold increase in advertising expenses, employee expenses and delivery costs.

Foodpanda, the food delivery firm owned by ride-hailing giant Ola reported a net loss of Rs 756 crore in FY19, a 230 per cent increase over the previous fiscal. Its burn rate of Rs 756 crore on a revenue of Rs 82 crore was one of the highest among Indian startups.