BENGALURU: Online food-ordering startup Swiggy has received funding of Rs 230 crore ($35 million) led by existing investors SAIF Partners, Accel Partners and Norwest Venture Partners in a deal that values the Bengaluru-based company at $125 million. A clutch of new investors including RB Investments, Harmony Partners and Russian billionaire Yuri Milner’s DST Partner Fund also participated in this investment round.
The funding — first reported by ET in its edition on November 30 — will be used to hire senior talent, strengthen technology and build brand recognition, according to Sriharsha Majety, the CEO of Swiggy. “With an average order size of Rs 300, our unit economics are healthy and we don’t depend on discounts to increase orders,” said Majety, who expects the company to turn in operating profits in two cities Bengaluru and Hyderabad by April. Currently, Swiggy delivers 20,000 orders and is growing 25% every month, according to company estimates. The company had raised about Rs 105 crore from Norwest Venture, Accel and SAIF Partners in June 2015 to expand operations to a dozen cities. But since then its plans have changed. It now aims to register a seven-fold increase in business from the eight cities it operates in now. Swiggy has partnered with close to 3,000 delivery boys on a pay- per-delivery model to fulfil orders on its platform.
The deal comes as the food technology market has started to consolidate, and will give the startup ammunition to take on players like TinyOwl, ZomatoOrder and FoodPanda. “Unit economics of Swiggy are improving month on month, as with higher order volumes and city wise density the company has been able to become more relevant to restaurants and increase the commission steadily.
Consumers have also started to pay for their timely deliveries,” said Sumer Juneja, director at Norwest. For Harmony Partners, a US-based growth capital investor, this will be their first investment in India. The firm has backed US-based on demand service Postmates, valued at $500 million and also recently invested in Anaplan, a cloud software company along with Wipro founder’s family office PremjiInvest.