Hyperlocal-based delivery startups appear to be a delight for venture capitals and their appetite for such startups is only increasing. Within five months of its Series A round, the Bengaluru-based food delivery platform, Swiggy, has raised $16.5 million Series B round from Norwest Venture Partners (NVP) and from an undisclosed global investment entity.
Existing investors SAIF Partners and Accel Partners also participated in the round.
The company will use the funding to spruce-up technology, infrastructure, expansion to other cities and hiring. Swiggy is looking to establish footprints in top 10 cities in a couple of months. In January this year, it snapped up $2 million Series A from Accel Partners and SAIF Partners (though it was made public in April).
Swiggy recently expanded its operations to Gurgaon and Hyderabad with over 100 restaurants on board in both cities. “We have grown 25X in terms of business (volume plus value) growth in comparison to January this year when we raised our Series A,” said Co-founder Sriharsha Majety to YourStory.
The Swiggy app (available on Android and iOS) has seen a great response with more than 50% of daily orders shifting from the website to the app quickly.
“We have seen a 10X growth in order numbers over the past few months and this investment will help us expand exponentially as we intend to establish ourselves in several new cities by the end of the year,” added Sriharsha. The company didn’t disclose the number of deliveries it’s currently facilitating but according to our sources, Swiggy delivers over 70,000 orders on a monthly basis.
The brainchild of BITS Pilani alumni Sriharsha, Nandan Reddy and Rahul Jaimani, an IIT-Kharagpur graduate, Swiggy had raised $18.5 million across two rounds within 10 months of its inception.
Sriharsha and Nandan earlier floated a logistics platform called Bundl which was shut down in June 2014 while Rahul did a stint at an online fashion store Myntra.
“In January, we were only a four-member team and at present we are a strong team of over 1150 people,” states Sriharsha. The company has about 800 on-field delivery boys along with 350 people across other functions.
“As part of Norwest’s investment focus on food tech and food services, we have been tracking Swiggy for a long time, and have been extremely impressed with the quality of the team, the company’s rapid growth and strategic execution,” said Sumer Juneja, Principal at NVP India.
Food and grocery delivery space has been witnessing an unprecedented faith of investors this year. More than $75 millions have been poured by VCs in the last six months. Gurgaon-based Grofers snapped up $45 million (in two rounds) while PepperTap secured $12 million in two rounds.
Besides startups, the food and grocery segment also drew attention of biggies like Amazon, Paytm, Zomato, and Ola. Last week, Ola launched an app (in beta) for groceries and daily needs in Bengaluru.
Besides aforementioned, Swiggy competes with merchant-focused delivery startup Quickli, Foodpanda, and Mealsonwheels among others. So far, food and grocery delivery startups are having a ball in India and it would be exciting to see how this space shapes and evolves in the future.