Food delivery start-up Swiggy said it had raised $1 billion in a funding round led by existing investor Naspers, a South African conglomerate. New investors Tencent, a Chinese technology giant, Hillhouse Capital and Wellington Management Company, along with existing investors such as DST Global, Meituan Dianping and Coatue Management, participated in the round.
The round, the single largest in India’s food technology sector to date, would help Swiggy bring more quality food brands closer to consumers and address gaps in supply through delivery-only kitchens.
“As we add more firepower to our vision of elevating the quality of life for urban consumers by offering unparalleled convenience, we’re pleased that visionary global investors share our purpose” -said Swiggy CEO, Sriharsha Majety.
CEO of food and ventures, Naspers, said that-the firm first partnered with Swiggy in April 2017 because of its sustainable, long-term business that stood out amongst others in India.
The online food ordering and delivery market is expected to grow at a compounded annual growth rate of more than 45% to reach $11 billion in gross merchandise value [GMV] by 2023- according to RedSeer Consulting, a research and advisory firm. Inclusive of the latest round, Swiggy has raised a total of $1.26 billion.
The funding would help it to compete with rivals such as Zomato, Uber Eats and Ola-owned Food panda, which are also betting big on the online food ordering and delivery market in the country.
Experts say that -the competition intensity is very high so definitely customer acquisition and retention is something that requires a good amount of investment and stating that online food delivery industry was one of the fastest growing spaces in the internet sector in the country.
Last year, it crossed $750 million in GMV and this year, it is expected to reach $1.7 billion-says experts. Since the last funding round six months ago, Swiggy said it had expanded to 42 additional cities and doubled GMV.
The company has close to 1.20 lakh active delivery partners. The firm said it would also use the capital to hire top-notch talent, especially for machine learning and engineering roles. Swiggy said it would also further strengthen its technology backbone and focus on building a next-generation artificial intelligence-driven platform for hyper local discovery and on-demand delivery.