Success! You're on the list.

Success! You're on the list.

India’s Swiggy becomes a decacorn, raises $700M at $10.7B valuation


The Covid-19 pandemic has caused a significant shift in consumer perception. Instead of travelling out, individuals now prioritise convenience and safety, and they expect to receive the delivery at their doorstep as soon as possible. As a result, seeing an expanding trove of on-demand hyperlocal delivery apps in India is unsurprising, given how important the concept has become in the current environment.

According to a recent report released by management firm RedSeer Consulting, the online penetration of food services in India is expected to double by 2025, with a gross merchandise value of about $13B.

To put some perspective on the growth, Grofers immediately expanded its operations and rebranded as Blinkit to compete with Zomato, Swiggy, and BigBasket in the food and grocery delivery market. Zepto, a Mumbai-based startup, also raised $100M in Series C funding.

Now, even as technology stocks were battered in the Indian market on January 24, Swiggy is the latest food and delivery startup to have raised $700M at a valuation of $10.7B, more than doubling its price in six months.

India’s fourth decacorn

Swiggy, based in Bengaluru, has now become India’s fourth decacorn to be valued at $10B or more, after fintech app Paytm, hotel aggregator Oyo, and ed-tech firm Byju’s.

Led by US-based VC Invesco, the $700M funding round saw participation from new 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. Existing investors such as Prosus Ventures, Alpha Wave Global, Qatar Investment Authority and ARK Impact also participated in the round.

Swiggy had raised $1.25B in July 2021 from SoftBank Vision Fund II, Prosus, Accel and Wellington at a valuation of $5.5B.

The food delivery startup said the fresh funding comes after a solid year of growth in which the startup nearly doubled the gross order value of its food delivery operation. Swiggy’s quick delivery service, Instamart, is expected to attain a $1B annual GMV run rate in the next three quarters, according to the company.

What about competition?

Swiggy will use the latest round of capital to boost its food-delivery business and expand its quick grocery delivery service, Instamart, where it competes against Zomato-backed Blinkit, Reliance-backed Dunzo, and new startup Zepto. Other participants in the market include Flipkart, Amazon, and Tata-owned BigBasket.

According to Sriharsha Majety, Swiggy’s co-founder and CEO, Instamart has achieved a GMV in 17 months that took the core food delivery business 40 months to achieve.

“We want Swiggy to be the platform that 100M people use 15 times a month,” says the company. We’ll keep investing in our people, products, and partners to have a positive impact on the ecosystem and advance the digital transformation of food and grocery delivery, as well as other on-demand businesses,” he added.

“As long-term investors, the Invesco Developing Markets Fund seeks investment opportunities in the world’s best companies, led by world-class management teams, and with the potential for long-term structural growth,” said Justin Leverenz, Chief Investment Officer at Invesco Developing Markets Fund, in a statement. “Our investment in Swiggy is an example of this.”

A third player, Amazon, has recently entered the Indian food delivery market, but as a Zomato official stated in a public conference last year, the American e-commerce giant has yet to make significant inroads in this area.

The company’s latest funding round exemplifies the divide between public and private markets. On the same day, Zomato’s stock was roiled on Indian exchanges, its market cap plummeted to $9.78B, it raised money at a valuation of $10.7B.

The spike in global and local bond yields, which has made their valuations richer than what their fundamentals indicate, has spurred selling in online businesses like Zomato, Paytm, and PolicyBazaar.

Related Posts

Get daily funding news briefings in the tech world delivered right to your inbox.

Enter Your Email
join our newsletter. thank you