Swiggy, one of the more popular food delivery platforms in India, has a reason to celebrate and bog down to continue working on its growing business. As announced today, the venture has secured a whopping $80 million (approx ₹517 crore) Series E funding round led by South Africa-based Naspers. This falls in line with chatter about the company looking to raise fresh funds in March this very year.
This is the first time the investment firm is pumping capital into the Indian food delivery startup, along with participation from its existing backers – Accel India, SAIF Partners India, Bessemer Venture Partners, Harmony Partners and Norwest Venture Partners. This takes the investment received by Swiggy to an overall sum total of around $155 million, with this being its biggest fundraising round till date.
The individual backing of each investor is unknown but Naspers has pitched in the maximum funds because it has bagged a seat on the board of directors. A significant and experienced addition to the team, especially when ex-Myntra co-founder Mukesh Bansal is off the team now.
In an official statement, Swiggy’s CEO Sriharsha Majety says that the food delivery venture will be employing a chunk of the fresh funds into building out its engineering and data science team, who in turn will develop its robust technological platform and allow the company better understand the needs of its customers. Majety further continues to add,
We have a fully scaled technology platform but will look at growing our data science and machine learning capabilities. Our current team size in data sciences in single digits but we plan to grow that. We will also double our engineering team by 2018 to 200 people and will be hiring for middle and senior leadership teams.
With this fresh capital infusion, Swiggy is no longer planning to stick to its existing business model and plans to branch out from a plain vanilla order placement and delivery operation. It will now also focus on experimenting with new ideas in collaboration with their restaurant partners. It will enable them to build upon their existing partnership while also developing a new scalable vertical for the company to add to their portfolio.
Very much like its arch-nemesis Zomato, the company has also set up cloud kitchens for restaurants who’re looking to serve in new areas but do not have the funds or physical space for the same. It is presently one of the most successful food delivery companies in the nation and survived the slowdown that plagued the ecosystem a few months back. This strength may have pushed South African investment firm Naspers to pump capital into Swiggy.
Ashutosh Sharma, head of investments in India for Naspers will be joining Swiggy’s board. He comments on the investment as under:
Swiggy has shown impressive growth in a highly competitive market. Naspers was attracted to the company’s exceptional execution in disrupting online food ordering and delivery in India while many players are struggling. Their ability to create a sustainable business, earning consumer trust through a reliable first-party delivery technology, positions them well for success.
Swiggy is currently operational in eight cities — Bangalore, Gurgaon, Hyderabad, Delhi-NCR, Mumbai, Pune, Kolkata, and Chennai — with about 12,000 restaurants on its platform. The company asserts to be have completed close to a million orders in April 2016, with an average delivery time of just 37 minutes. It is now planning to utilize a chunk of this infused capital to expand into even new geographies — by cutting down on delivery costs.
The company is currently operating at a massive loss of ₹137.18 crore in FY 2015-16, which ballooned 65 percent in comparison to ₹2.12 crore in FY 2014-15. Swiggy is already operating at optimal delivery costs, thanks to its own fleet and surge charges collected from the customer. This has enabled it to lead the race in the food delivery space by delivering a massive 6x growth in revenues last year. This funding will further enable it to up the ante against Zomato and the newest entrant — UberEats.
