Six months after raising $1.25 billion, Indian food delivery startup Swiggy has raised $700 million in a Series K round. The financing round which was led by Invesco saw the participation of Baron Capital Group, Sumeru Venture, Kotak, Axis Growth, Sixteenth Street Capital, Ghisallo, Prosus Ventures, Alpha Wave Global, Qatar Investment Authority, IIFL AMC Late Stake Tech Fund, Smile Group, Segantii Capital and ARK Impact.
Last year in July, Swiggy was valued at $5.5 billion, and according to inside sources, the company is currently valued at $10.7 billion. The company’s valuation has surpassed that of rival Zomato which went public last year and is valued at below $10 billion. With the new funding, Swiggy plans on increasing its offerings including its instant delivery service called Instamart, in all of South Asia.
Swiggy’s Instamart is one of its biggest “selling points”. The startup says that Instamart is on the path to reaching an annual GMV run rate of $1 billion in the next three quarters, and it has been one of its areas for focus in the last two years. Last year, Swiggy announced that it was planning to invest $700 million to scale its instant delivery arm and expand its reach. The company also acknowledged that Instamart was beginning to see competition such as Zepto’s delivery service and BlinkIt, which formerly went by the name Grofers. According to Sriharsha Majety, co-founder and chief executive of Swiggy, Instamart has reached a GMV in just 17 months what it took the core food delivery business 40 months to deliver.
“Our goal is to make Swiggy the platform that 100 million consumers can use 15 times a month. We will continue to invest in our people, products, and partners to create a positive impact on the ecosystem and accelerate the digital transformation in food and grocery delivery and other on-demand services”, he said.
According to a report written by analysts at Bernstein to clients, India’s food services market is expected to reach $97 billion by March 2026. “India food services market is large and expected to reach $97 billion by FY25. Organized food service is growing faster and is expected to reach a 55 percent market share by FY25. We expect online penetration to expand to 20 percent by FY25 and market size to reach $20 billion growing at 46 percent CAGR. A significant part of the growth will be driven by new customer acquisition and penetration into smaller markets. Zomato had 10 million monthly transacting users (MTU) in FY20, expected to increase 5x by FY25 to ~50 million”, the report said.
In a statement speaking about the funding round, Chief Investment Officer Justin Leverenz of Invesco Developing Markets Fund said “As long-term investors, the Invesco Developing Markets fund seeks investment opportunities in the best companies in the world, led by world-class management teams, and that has the potential for long-term structural growth. Our investment in Swiggy represents such an investment”.