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Swiggy secures $110 mn as fight  gets tough 

With the fresh investment, the equity holding of Naspers’ venture capital arm Prosus NV in  Swiggy crosses 40%

Published: 27th February 2020 06:50 AM  |   Last Updated: 27th February 2020 06:50 AM   |  A+A-

By Express News Service

BENGALURU: With competition steadily heating up in the online food delivery segment, restaurant aggregator and food delivery major Swiggy has secured another round of capital from a clutch of investors, running into more than $110 million. According to sources, over $100 million of this investment came from the company’s main investor Naspers’ venture capital arm Prosus NV, with the South African internet giant’s equity holding in Swiggy crossing 40 per cent.

The new fund-raising round, which is part of a larger effort to garner $150 million in capital, also saw other existing investors like Hadley Harbour Master Investments and Chinese local services platform Meituan participating, documents filed with the Registrar of Companies (RoC) showed. The round, which keeps Swiggy’s valuation at over $1 billion, saw investments secured from China’s Tencent, Hillhouse Capital, and Wellington Management too.

The funding round comes just weeks after rival Zomato secured $150 million from existing investor and Ali Baba affiliate Ant Financial and went on to acquire cab aggregator Uber’s India food delivery unit Uber Eats. The company has already subsumed Uber Eats’ India operations with users being redirected to Zomato, which is now valued at $3 billion after its latest fund raising round.

“Over the last couple of years...we have made strong strides in our vision of delivering unparalleled convenience to urban consumers... and created multiple growth avenues for our partners while continuing to invest in new lines of business,” Sriharsha Majety, CEO and cofounder of Swiggy, said in the platform’s valuation statement, going on to note that the company is continuing to focus on implementing its “vision while building a sustainable path to profitability”.

According to a report from Inc42’s DataLabs, the Indian online food delivery segment is forecast to hit $12.5 billion by 2023, and Swiggy and Zomato currently dominate the sector with a combined market share of over 90 per cent. Both start-ups are engaged in a tussle for market dominance as the nascent segment grows rapidly, and experts note that a substantial war chest is a prerequisite to fund such aggressive expansions.

Competition
Swiggy’s funding round comes just weeks after rival Zomato secured $150 million from existing investor and Ali Baba-affiliate Ant Financial and went on to acquire cab aggregator Uber’s India food delivery unit Uber Eats. The firm has already subsumed Uber Eats’ India operations with users being redirected to Zomato, which is now valued at $3 billion after its latest funding round.


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