Swiggy raises $35 million in Series C from RB Investments, Harmony Partners and existing investors
Swiggy has raised a Series C round of $35 million from Singapore-based RB investments and New York-based Harmony Partners, along with existing investors Norwest Venture Partners, SAIF Partners and Accel Partners.
This round of funding makes Swiggy one of the strong players in the food delivery segment. The funds will be used to build a strong leadership team, technology upgradation and enhancement of customer experience. Present in Bengaluru, Delhi, Mumbai, Hyderabad, Pune, Chennai and Kolkata, Swiggy has close to 5, 000 restaurants listed on its platform. The company will also expand Swiggy Express, an in-house platform offering chef-made meals in less than 20 minutes. It is also offer customers an option to pre-order meals.
The team claims that order value has grown over 20 times in the last few months with an average delivery time of 36 minutes per order. Sriharsha Majety, CEO, Swiggy adds that while the focus will continue to be towards expansions, they will now also focus on sustainability and profitability.
Nandan Reddy, Co-founder at Swiggy, adds that this funding will be focused on increasing the pie of the business. He adds that with their platform, Swiggy wants the restaurants to expand across cities without much investment from the restaurants on building brick and mortar setups.
Sumer Juneja, Partner at Norwest Ventures, says the end goal is to revolutionise the way India eats. Michael Chou, Partner at Harmony Partners, says that after analysing the Indian market space, they believed that Swiggy is in the best position to win given their focus, execution, and long-term vision.
The second half of 2015 was dominated by problems faced by food tech startups like TinyOwl, which scaled back operations, and Spoonjoy, which shut down operations and was acquired by Grofers. However, Swiggy's is the fourth foodtech funding announcement of the year. FreshMenu, WIMWI and B9 Beverages raised funding in January. These funding rounds show clearly that investors continue to have an appetite for foodtech. Indian consumers, especially in the metros, are increasingly relying on 'non-home cooked' food, which has given rise to the new crop of food tech startups, who are offering everything from fresh meals prepared by home chefs to home-delivered ready-to-cook ingredients, apart from doing restaurant deliveries. While the demand is there - food services is estimated to be a $50 billion market - issues of scale plague this sector. Companies like TinyOwl have borne the brunt of scaling up too soon. Also, these young startups are burning up a lot of investor cash in their quest for growth, as evidenced by the many rounds of funding the companies have raised in a short period of time. Swiggy raised its Series A and B rounds within five months of each other in 2015. These startups are finding financial backers, but they will soon have to show that the growth can be sustained at a lower burn. Otherwise the funding tap could be shut off.