India’s Swiggy raises $43M to expand to new businesses

Indian food delivery startup Swiggy has bagged an additional $43 million as it looks to expand to new businesses.

Existing investor Tencent and new players Ark Impact, Korea Investment Partners, Samsung Ventures and Mirae Asset Capital Markets financed the new tranche, which is part of Swiggy's ongoing Series I round. In February, the Bangalore-based startup had raised $113 million from Prosus Ventures, its largest investor, and others as part of the current round.

The new round, which pushes five-year-old Swiggy's total raise-to-date to $1.42 billion, values it at $3.6 billion, a person familiar with the matter told TechCrunch. Tencent has led today's tranche with about $19 million of investment, according to figures disclosed by Swiggy to the local regulator.

The announcement follows New Delhi government's three-week lockdown for its 1.3 billion people in a bid to contain the spread of the coronavirus outbreak. The lockdown has disrupted several businesses including food delivery. As firms grapple with disruption, many are beginning to explore new categories to serve customers. Swiggy, which is operational in 520 cities, has expanded to grocery delivery in select parts of the country. (Swiggy expanded beyond food delivery last year.)

A Swiggy executive said the company, which raised $1 billion in December 2018, is looking to build a "sustainable path to profitability."

In a statement, Rahul Bothra, CFO at Swiggy, said the company has "built a sustainable food delivery business over the years while solving various customer pain points. As we continue to strengthen and expand our services that offer unparalleled convenience to our consumers, we are humbled by the faith shown by our investors year-on-year and welcome the new investors on board. Our focus remains to execute on our vision while building a sustainable path to profitability."

Swiggy's rival, Zomato, has also picked up capital in recent months. In January, the 11-year-old firm raised $150 million from Ant Financial. The company's top executive said then that it was close to raising another $450 million in a matter of few days. The company has raised an additional $5 million since - a spokesperson did not respond to a request for comment.

Both the firms have seen the volume of their daily orders drop from more than 5 million to under a million in recent days. But the disruption is not unique to either of them so long-term investors remain bullish.

The exit of Uber from India's food delivery space earlier this year - after selling its local food business to Zomato for $206 million - has made the market a duopoly play. At stake is a $4.2 billion opportunity, according to research firm Redseer.