Swiggy closes $1.25 bn funding led by SoftBank

Food ordering and delivery platform Swiggy on Tuesday announced closure of $1.25 billion (approximately Rs 9,345 crore) funding led by SoftBank Vision Fund 2 and Prosus.

As per sources, the closure of this round pegs the valuation of the company at $5.5 billion (around Rs 41,125 crore).

This comes close on the heels of closure of competitor Zomato's mega initial public offering (IPO) which gives Zomato a valuation of Rs 64,365 crore.

The funding marks the first investment in the Indian food delivery category by SoftBank Vision Fund 2, with participation from the company's long-term investor, Prosus, and other existing investors Accel Partners and Wellington Management, Swiggy said in a statement.

In addition, new investors Qatar Investment Authority, Falcon Edge Capital, Amansa Capital, Goldman Sachs, Think Investments and Carmignac participated in the round, it stated.

This latest fundraise was heavily oversubscribed following strong interest from investors, and comes on the back of Swiggy's rapid recovery from the impacts of COVID-19 and subsequent growth in 2020-21, Swiggy said.

“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.

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 added.

"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," Majety said.

"I believe the next 10-15 years offer a once-in-a-lifetime opportunity for companies like Swiggy as the Indian middle class expands and our target segment for convenience grows to 500 million users," he added.

This investment will further accelerate the company's multi-year strategy of growing its core food delivery business and building new food and non-food adjacencies in 2021 and beyond, Swiggy said.

To support this, Swiggy will enhance its capabilities in technology and artificial intelligence (AI), and strengthen teams across engineering, product, data science and analytics as well as in business and supply chain for its newer initiatives, it added.

With the closing of this round, Swiggy will be valued at $5.5 billion, sources said.

"We are excited to partner with Swiggy as they increase their service offerings and daily consumer touchpoints in the rapidly developing digital economy," SoftBank Investment Advisers Managing Partner Munish Varma said.

SoftBank has successfully backed multiple food delivery platforms globally and seen the value of providing high quality convenience to consumers, he added.

On the development, Prosus Food CEO Larry Illg said, "Prosus has one of the most comprehensive views of food delivery globally given the reach of our portfolio and Swiggy continues to exhibit strong execution and has one of the best operational teams in food delivery globally."

Founded in 2014, Swiggy connects consumers to over 1,50,000 restaurant partners and stores in over 500 cities.

Photograph: PTI Photo