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Naspers leads $80 mn Series E round in food-delivery startup Swiggy

30 May, 2017

Online food ordering startup Swiggy.com, which is run by Bengaluru-based Bundl Technologies Pvt. Ltd, has secured $80 million (around Rs 517 crore) in its Series E round of funding led by South African technology group Naspers.

The round also saw participation from existing investors such as Accel India, SAIF Partners India, Bessemer Venture Partners, Harmony Partners and Norwest Venture Partners, the company said in a statement.

As part of the deal, Ashutosh Sharma, head of investments in India for Naspers, will join Swiggy’s board.

The firm will use the funds to launch a suite of products and services to enhance customer experience. In addition, Swiggy plans to double its technology headcount and increase investments across core engineering, automation, data science, machine learning and personalisation.

Mumbai-based investment bank Avendus Capital acted as adviser to the deal.

“Swiggy has shown impressive growth in a highly competitive market. Naspers was attracted to the company’s exceptional execution in disrupting online food ordering and delivery in India while many players are struggling. Its ability to create a sustainable business, earning consumer trust through a first-party delivery technology, positions it well for success,” Sharma said.

With this, Swiggy has raised about $155.5 million so far, including $15 million it secured in a Series D round from Bessemer Venture Partners, Accel India, SAIF Partners and Norwest Venture Partners in September 2016. It had raised $35 million in its Series C funding in January 2016.

Swiggy had posted a loss of Rs 137 crore in FY2015-16 on a total income of Rs 23.6 crore. It had net sales of Rs 20 crore.

The latest infusion of funds will help Swiggy beef up its war chest to take on bigger rivals Zomato and Foodpanda.

It processed 1 million orders in May last year. In the same month, Zomato clocked 750,000 orders.

Zomato, however, has managed to scale up revenues, cut costs and build new revenue streams. The company in a recent blog post said its food ordering service has clocked more than 2 million orders in March this year, just over two years after it was launched.

Zomato’s food ordering business contributes 20% to the company’s top-line and the company claims its unit economics are positive now, and margins hover around 55%.

Its cash burn dropped 81% to $12 million in FY2016-17 from $64 million a year before. Revenues surged about 80% to $49 million (Rs 316 crore) in FY2016-17.

Zomato has raised about $225 million so far.

Rocket Internet-backed food delivery firm Foodpanda India’s loss widened in FY2015-16 even as its revenues jumped to Rs 37.81 crore from Rs 4.7 crore in the year-ago period. Losses for the financial year ended March 2016 quadrupled to Rs 142.6 crore from Rs 36 crore a year ago.

Foodpanda has raised $310 million in funding so far, including $110 million from investors led by hedge fund Goldman Sachs Investment Partners in 2015.

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Naspers leads $80 mn Series E round in food-delivery startup Swiggy

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