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Swiggy, Zomato raise fresh funding as lockdown disrupts food delivery ops
Photo Credit: VCCircle

Indian food delivery rivals Swiggy and Zomato have received fresh capital with the former raising as much as $43 million (Rs 327.8 crore) as the companies brace themselves to function under a lockdown enforced due to the coronavirus pandemic.

According to RoC filings accessed by VCCircle, existing investor Tencent led Swiggy's Series I funding round as the Chinese company alone brought in Rs 142.48 crore.

New investors who participated in the round include Ark Impact (Rs 6.06 crore), Korea Investment Partners (Rs 35.6 crore) and MACM India Growth Fund (Rs 14.23 crore) also pooled in the capital.

Separately, media reports citing Swiggy's statement said that two other new investors Samsung Ventures and Mirae Asset Capital Markets also took part in the company's funding round.

This funding round comes just within weeks after Swiggy had raised around $112 million led by its existing investor South African technology conglomerate Naspers in February.

Swiggy previously raised $1 billion at a valuation of $3.3 billion in December 2018. According to industry estimates, Swiggy clocked 900,000 to one million daily orders, and burns close to $40 million every month.

However, Swiggy and its main rival Zomato got a major jolt because of the lockdown. According to RedSeer Consulting, India's food delivery business took a hit in the first two weeks of March as orders declined by 20%.

Meanwhile, Zomato raised $5 million from British investment manager Baillie Gifford’s Pacific Horizon Investment Trust as part of its Series J round of funding, according to filings with the RoC.

Earlier in January, Zomato had raised $150 million from existing investor Ant Financial, the payments affiliate of Chinese e-commerce conglomerate Alibaba Group Holding Ltd.

Just days after the funding that month, Zomato agreed to acquire ride-hailing company Uber Technologies Inc.'s food delivery business in India in an all-stock transaction. The deal gives Uber a 9.99% stake in Zomato.

The acquisition marked a big consolidation in the highly competitive and heavily funded food delivery market in India and heralded a two-way race between Zomato and rival Swiggy from thereon.

Before the fundraising from Ant Financial in January, Zomato had last raised funding about a year ago, mopping up about $62 million from investors including Berlin-based Delivery Hero and China’s Shunwei Capital.

Gurugram-based Zomato reported consolidated net sales of Rs 332.27 crore, Rs 466.36 crore, and Rs 1,312.58 crore for the 2017, 2018 and 2019 financial years, according to VCCEdge, the data research arm of Mosaic Digital.

Swiggy reported standalone net sales of Rs 133 crore, Rs 417 crore and Rs 1121.7 crore for the 2017, 2018 and 2019 financial years.

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