Naspers Bets Big On Indian Food Delivery Space, Infuses $80 Million In Swiggy
- Food delivery startup Swiggy raises $80 million from Naspers and existing investors
- Naspers makes its second investment in the Indian startup space, in less than a month
- Swiggy becomes the second most funded homegrown startup in India
Online food delivery startup Swiggy has raised $80 million in its sixth round of funding led by Naspers Ltd. Existing investors – Accel Partners, SAIF Partners, Bessemer Venture Partners, Harmony Partners and Norwest Venture Partners – have also participated in what is Swiggy’s largest fundraising yet, the company said in a media statement on Tuesday.
This is Naspers’ second investment in the Indian food startup space in less than a month. The South Africa-headquartered fund house had pumped in $431.4 million in Delivery Hero, the parent company of Foodpanda.
Swiggy will use the funds to introduce new products and service offerings to enhance customer experience. This will include doubling its headcount in the technology division covering core engineering and automation.
“This investment by Naspers is further testimony to Swiggy’s vision and performance,” said Sriharsha Majety, co-founder and CEO, Swiggy.
Ashutosh Sharma, Nasper’s head of investments in India, will join Swiggy’s board.
The latest funding round makes Swiggy the second most funded homegrown food delivery startup in India, after Zomato.
The world’s largest cab aggregator Uber recently launched UberEats in Mumbai. India’s food delivery market in India is worth $15 billion, according to a report by the Indian Brand Equity Foundation, a trust set up by the commerce ministry, but most startups in the space have so far not had an easy ride.
A number of them have either shut shop or merged with competition, as newer players look to undercut existing operators’ margins and offering more discounts to the customers. Tiny Owl, a venture backed by Matrix Partners, Sequoia Capital and Nexus Venture Partners was merged with local delivery startup Roadrunnr last year and renamed Runnr. Others players such as Dazo, ZuperMeal, BiteClub and Eatlo shut shop.
Existing operators are also grappling with mounting losses. Swiggy burnt around Rs 13 crore a month in financial year 2015-16, according to its filings with the Registrar of Companies. Its losses rose 65 times to Rs 137.18 crore during the same period. Foodpanda’s losses also widened nearly four-fold in FY16 to Rs 142.6 crore, according to data shared by the company.