[MUMBAI] Indian food delivery app Swiggy is closing an US$800 million funding round from investors including Falcon Edge Capital LP and Goldman Sachs Group Inc, co-founder and Chief Executive Officer Sriharsha Majety said in a note to employees on Monday.
The fundraising was heavily subscribed and existing investors including Accel and Naspers Ltd participated, Mr Majety wrote in the note viewed by Bloomberg. The new capital will speed up growth in its existing businesses and help seed new ones, he said, as the convenience delivery segment grows to half-a-billion users in the next decade.
India's consumer startups are raking it in as the country's internet user base swells and smartphone users are estimated to reach 1 billion in the coming years. The coronavirus pandemic is also driving competition in food delivery, which is seen as a safer option than eating out as a second wave of infections sweeps Indian cities such as Mumbai.
Food-delivery startups DoorDash Inc and Deliveroo Holdings Plc have gone public in recent months with mixed results. San Francisco-based DoorDash has climbed more than 30 per cent since its IPO in December, while London's Deliveroo has tumbled 28 per cent since its offering in March.
The Swiggy funding will raise its valuation to nearly US$5 billion, a person familiar with the deal said. Swiggy competes with multiple food delivery startups including fellow unicorn Zomato, backed by Ant Financial and Tiger Global, and the food delivery arm of Amazon.com Inc's India unit, which recently unveiled its service to Prime members in dozens of zip codes in the city of Bengaluru, formerly Bangalore.
A Swiggy spokesman declined to comment. Over the last year, "we have managed to drive a strong recovery in the food delivery business with a very clear path to profitability," Mr Majety wrote. "The food delivery business is the strongest it's ever been and now we are well on our way to drive continued growth over the next decade." The co-founder said the startup's hyperlocal grocery delivery service is showing "amazing promise."