Bengaluru-based Bundl Technologies Pvt Ltd, which owns and operates online food ordering platform Swiggy, has raised $15 million (Rs 100 crore) in a Series D funding round led by Bessemer Venture Partners.
Swiggy's existing investors, which include firms such as Accel India, SAIF Partners and Norwest Venture Partners (NVP), also participated in the round, the company said in its statement. The round takes the total funds raised so far to $75.5 million, it added.
The funds will fuel Swiggy’s next phase of growth, with an improved customer experience at its core. "This will include technology upgrades, a wider spread of restaurants to choose from and better delivery efficiency," the statement said.
In January, the startup raised Series C funding of $35 million, from existing and new investors, including New York-based Harmony Partners and Singapore-based RB Investments.
The startup was founded in August 2014 by Sriharsha Majety, Nandan Reddy and Rahul Jaimini. Majety and Reddy are BITS-Pilani alumni while Jaimini is an IIT-Kharagpur alumnus.
Swiggy’s platform enables customers to order food from restaurants in eight cities, including Bengaluru, Gurgaon, Hyderabad, New Delhi, Mumbai and Pune. It claims to have over 9,000 restaurants listed on its platform. The startup also claims to deliver 40,000 orders per day. Swiggy’s average delivery time is of 37 minutes, which the company claims is an industry benchmark.
Swiggy said that, to fuel growth, it has hired vice presidents across functions such as marketing, product, human resources, design and finance.
“Swiggy's full-stack approach coupled with great execution has resulted in unparalleled customer experience, retention and business economics,” said Vishal Gupta, managing director, Bessemer Venture Partners.
Swiggy has raised funds at a time when other startups with similar business models are laying off staffers or shutting down businesses. Many firms in the online food ordering space have been facing challenges in terms of raising funds and scaling up. While startups such as Eatfresh, Faasos and FreshMenu follow a ‘full-stack’ model wherein they manage the end-to-end food-supply process from preparation to delivery, firms such as Swiggy, TinyOwl, Zomato Order and Foodpanda act as standalone food ordering platforms.
“Getting the unit economics right is the most important part. Startups which have not got unit economics right have not succeeded. It's still a very small market limited to few cities, but it is growing rapidly," Sreedhar Prasad, partner-management consulting at KPMG India, told TechCircle recently. “For players like Swiggy and Zomato, this model is good in the metros as you get enough restaurants to choose from.”
The online food ordering business in India is estimated to be worth around Rs 6,000 crore, growing at about 30 per cent month-on-month, according to a report by India Brand Equity Foundation, released earlier this year. However, this segment is transaction-driven and margins are wafer-thin.
Avendus Capital was the adviser to Swiggy in this deal.
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