South African technology group Naspers and Chinese internet giant Tencent may jointly invest around $150-200 million in homegrown food delivery platform Swiggy, reports The Economic Times citing people aware of the development.
Naspers - an existing investor in Swiggy - is likely to lead the funding round after Japan's SoftBank Group and Indian e-commerce major Flipkart ended talks with Swiggy, the report added.
The investment would give the three-year old Swiggy a pre-money valuation in the region of $600-650 million, the report said.
Swiggy's most recent funding round was in May last year when Naspers invested $80 million during its Series E round. The startup was valued at $400 million at the time.
According to the report, SoftBank ended its interest in Swiggy after a consortium of investors led by the Japanese investment giant chose to buy a large number of shares of Uber Technologies. That deal gives SoftBank direct entry into the Indian online food business via Uber's food delivery arm, UberEats, which was launched last May.
As for Flipkart, lack of consensus on the payment channel for Swiggy proved to be a deal-breaker. Swiggy refused to accept Flipkart's demand to make PhonePe - the e-commerce's firm digital payments platform - the only payments option on its app, which currently lets customers pay through Paytm, MobiKwik and Freecharge among other payment methods.
An email query sent to Swiggy seeking more information on the development did not elicit an immediate response.
Reports in recent months had suggested that Chinese e-commerce giant Alibaba was also in the fray for an investment in Swiggy.
Apart from Naspers, Swiggy is backed by Accel India, SAIF Partners India, Bessemer Venture Partners, Harmony Partners and Norwest Venture Partners.
Bundl Technologies Pvt. Ltd, which runs Swiggy, is among the most well-funded food-tech startups in India and has mopped up about $155.5 million so far.
Swiggy and rival Zomato together control about 80% of the Indian online food delivery industry.
The company clocked revenues of Rs 133 crore for 2016-17, a six-fold increase from Rs 20 crore the previous year. However, its losses widened to Rs 205 crore in 2016-17 from Rs 137 crore the previous year as costs more than doubled.
Zomato, on the other hand, increased its revenue and narrowed its losses. In addition to food delivery, the Gurgaon-headquartered startup also offers restaurant listings, restaurant reservations and other services.
The likely investment in Swiggy comes on the heels of Indian unicorn Ola foraying into foodtech with the acquisition of Foodpanda last month.
The homegrown cab aggregator has committed to inject $200 million into Foodpanda India to expand its business.
Foodpanda has lost less on every rupee in revenue than Zomato and Swiggy for the financial year ending March 31 2017.
The existing foodtech players may also have to brace for more competition, with a recent report suggesting that UK food delivery startup Deliveroo is considering an entry into India next year.
Meanwhile, Swiggy has been tweaking its business model of late and recently appointed former Reckitt Benckiser executive Vishal Bhatia. It also acqui-hired Bengaluru-based gourmet Asian food startup 48East to strengthen its new supply business.