Food-delivery giant Swiggy has raised $700 million in Invesco-led new funding, which, according to sources, has made the outfit a decacorn, almost doubling its valuation to $10.7 billion.
Swiggy’s latest valuation is almost double that of Zomato before the latter went for its initial public offering. Zomato was valued at $5.4 billion before its IPO.
The round saw participation from a host of investors such as 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.
Swiggy’s existing investors Alpha Wave Global (formerly Falcon Edge Capital), the Qatar Investment Authority, and ARK Impact, along with its long-term investor Prosus, also participated in the round.
Bengaluru-based Swiggy has overtaken budget hospitality company Oyo, whose valuation dropped to $8 billion in 2020 from $10 billion in 2019, and then increased to $9 billion in 2021.
Swiggy has overtaken sports technology company Dream Sports, the parent firm of fantasy sports platform Dream11.
This investment in Swiggy comes at a time when the adoption of food and online grocery is accelerating and consumer demand for Swiggy’s many services continues to grow.
While the food-delivery business has nearly doubled in gross order value (GOV) in the last year, this fundraise will enable Swiggy to accelerate growth on the core platform and make meaningful investment to grow Instamart, its quick commerce grocery service which remains well-positioned to continue to lead the emerging space and set to reach an annualised gross merchandise value (GMV) run rate of $1 billion in the next three quarters.
The company will strengthen its investment in the broader ecosystem. The fundraise will give Swiggy enough firepower to take on rivals such as Zomato, Amazon, Flipkart, Dunzo, Licious, and Ola Foods.
“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,” said Sriharsha Majety, chief executive officer and co-founder, Swiggy.
“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,” he added.
Last year in July, Swiggy had closed a $1.25-billion fundraise, marking the first investment in the category by SoftBank Vision Fund 2.
This raised the valuation of the start-up by more than 50 per cent to $5.5 billion from $3.6 billion earlier, according to industry sources.
In the past few months, Swiggy has expanded Instamart to 19 cities. Swiggy Genie, Swiggy’s pick-up and drop service, is present in 68 cities, while its meat-delivery service and daily grocery service, Supr Daily, are present across all major Indian cities. It also launched Swiggy One, India’s first comprehensive membership programme with benefits across food, groceries, and other on-demand services.
“As long-term investors, the Invesco Developing Markets Fund seeks investment opportunities in the best companies in the world, led by world-class management teams that have the potential for long-term structural growth,” said Justin Leverenz, chief investment officer, Invesco Developing Markets Fund.
“Our investment in Swiggy represents one such investment.”
Before starting Swiggy, Majety quit his job at Nomura, Japan’s largest investment bank, and went on a backpacking trip by bicycle to Portugal, Spain, France, Italy, and Greece. After returning, he founded a logistics platform for online retailers, which he had to shut down. An alumnus of Birla Institute of Technology & Science (Pilani), Majety, along with his college mate Nandan Reddy and IIT Kharagpur graduate Rahul Jaimini, launched Swiggy in Bengaluru in 2014.