[Funding] Swiggy paces up fundraise amid the closure of Zomato IPO; raises funds from Softbank and others

FoodTech Unicorn Swiggy closed $1.25 billion (approx. Rs 9,345 crore) led by SoftBank Vision Fund 2 and Prosus. The funding will value Swiggy at around $5.5 billion (approx Rs 41,125 crore). When it raised funds in April, the food-tech valued a little under $5 billion, up from $3.6 billion in 2020. The new valuation comes at the heels of Zomato IPO which values Zomato at Rs 64,365 crore.

The funding marks the first investment in the Indian food delivery category by SoftBank Vision Fund 2. Existing investors Prosus, Accel Partners, and Wellington Management also participated in the round. Further, new investors Qatar Investment Authority, Falcon Edge Capital, Amansa Capital, Goldman Sachs, Think Investments, and Carmignac participated in the round, Swiggy said in a statement. The company also added that the latest fundraising was heavily oversubscribed following strong interest from investors. This comes on the back of Swiggy's rapid recovery from the pandemic impact and subsequent growth in 2020-21.

Use of funds

"The participation of some of the most visionary global investors is a huge vote of confidence in Swiggy’s mission and ability to build an enduring and iconic company out of India," Swiggy CEO Sriharsha Majety said. "Our biggest investments will be in our non-food businesses that have witnessed tremendous consumer love and growth in a short span, especially in the past 15 months of the pandemic."

Majesty, reportedly also said that he intends that the company stay private. He will not take the IPO route and the Zomato IPO does not in any way change Swiggy's strategy, he said. The scope of food delivery in India is massive and over the next few years. The company will continue to invest aggressively into growing this category, he further added. "I believe the next 10-15 years offer a once-in-a-lifetime opportunity for companies like Swiggy. The Indian middle class expands and our target segment for convenience grows to 500 million users," he commented.

This investment will further accelerate the company’s multi-year strategy of growing its core food delivery business; Swiggy will also build food and non-food adjacencies in 2021 and beyond with increased tech capabilities in AI, expanded teams, and new supply chain initiatives.