Homegrown e-commerce major Flipkart may invest $50 million (around Rs 327 crore) into food delivery platform Swiggy, according to a report by an online media publication.
The Ken, which reported the development citing unnamed sources, stated that Chinese internet conglomerate Tencent is also likely to make an investment, taking the total investment to $100 million. VCCircle could, however, not independently verify this.
Flipkart, Tencent and Swiggy did not immediately respond to queries from VCCircle, seeking information.
The development comes at a time when media reports in the past few weeks have stated that cash-laden Flipkart has initiated investment talks with a bunch of vertical e-commerce and other players such as BookmyShow, Urbanclap, Urban Ladder and Pepperfry.
Besides, there have also been talks of a possible merger between Zomato and Swiggy; however, both companies have denied it.
Flipkart, which recently raised close to $4 billion, is looking to broaden the scope of its services and offerings besides being just an e-commerce marketplace. An investment into vertical players like Swiggy will help it achieve that objective. For the investee companies, it provides them a more broader investor ecosystem and access to an additional channel for its consumers.
Flipkart is reportedly developing a WeChat-like app, where it aims to become an aggregator of several services that will operate under a single platform. If and when it materialises, investments of these sort are likely to stand Flipkart in good stead.
Besides, Flipkart has also recently made its second foray into the grocery segment through the soft launch of Supermart. The success of online grocery delivery often boils down to hyperlocal delivery capabilities. While Flipkart may have built a significant business out of its logistics vertical eKart, delivering groceries is a different ball game altogether.
On the other hand, Swiggy by virtue of its business model, has a hyperlocal DNA into its delivery vertical. The Ken report stated that the likely Flipkart investment will also explore synergies on this front, where the e-commerce major will leverage Swiggy’s delivery fleet for Supermart.
Swiggy, which is one of the significantly funded startups in the food-tech space, has raised about $154.67 million so far. In its last funding round in May, it raised $80 million in a Series E round led by South African technology conglomerate Naspers. Swiggy is also backed by Accel India, SAIF Partners India, Bessemer Venture Partners, Harmony Partners and Norwest Venture Partners.
For the financial year 2016-17, Swiggy clocked a six-fold rise in revenue at Rs 133 crore from Rs 20 crore in the previous year. Losses, however, widened to Rs 205 crore in FY17 from Rs 137 crore in the previous year. Total expenditure, too, surged to Rs 345 crore from Rs 157 crore in FY 15-16.