The food delivery market in India is a strong one. Fuelled by the pandemic, it is slated to reach about $21 billion in 2026 at a CAGR of 30.1% from 2021 to 2026. While there are several players operating in the sector, the biggest names are Swiggy and Zomato. Both clock nearly 1.3-1.5 million orders daily as the adoption of food and grocery delivery continues to rise across both Tier-I and Tier-II cities in the country.
Recently. Zomato’s fortunes have not favored it. Its stocks keep tumbling down amidst the intense global sell-off. It is currently trading at ₹98.15 apiece, which is slightly better than the ₹92/share it was trading at earlier.
The opposite is true for its rival Swiggy, which reached new heights after raising $700 million in fresh funding led by US asset manager Invesco, on Monday.
The funding round included participation from 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, as well as existing investors Alpha Wave Global (formerly Falcon Edge Capital), the Qatar Investment Authority, ARK Impact, and Prosus.
The latest funding round almost doubles the valuation of Swiggy to $10.7 billion, catapulting it into the decacorn club.
Now, Swiggy is the sole decacorn in the online food delivery sector, and the latest Indian decacorn across all categories – Paytm, Oyo, Flipkart, and Byju’s are the other decacorns. Not only has Swiggy’s current valuation overtaken Zomato’s current market cap, but the company has also climbed up the ladder to become the second-most valuable privately held startup in India after Byju’s.
It seems that the proceeds from the funding round will be deployed towards fueling growth on its core platform and investing to scale up Instamart, its quick delivery business.
Instamart was Swiggy’s answer to Blinkit, Zepto, BigBasket, and other players in the quick commerce industry, and it is fast making a name for itself. In fact, Instamart is set to clock an annualized GMV run rate of $1 billion in the next three quarters (according to Swiggy) and is currently operating across 19 cities.
Swiggy also plans to strengthen its investment in the broader ecosystem and continue to provide tough competition to Zomato, Dunzo, and other rivals. It said that its food delivery category nearly doubled in gross order value (GOV) in the last year.