SoftBank Vision Fund is in the advanced stages of talks to invest $450 - $500 million in Swiggy, which will value the food delivery start-up at $5.5 billion. Last April, Swiggy was valued at $3.65 billion when it raised an additional $43 million in April 2020 as part of its ongoing Series I round, which mopped up a total of $156 million, taking its cumulative fundraise to $1.42 billion.

This new financing round could be part of its Series J fundraise in addition to $800 million that Swiggy has raised from new investors including Falcon Edge Capital, Goldman Sachs, Think Capital, Amansa Capital and existing investors Prosus Ventures and Accel Partners.

Rival Zomato, which is preparing for an IPO later this year, is valued at around $5.4 billion and has raised close to $1 billion over the last six months.

Competition in the online food delivery space began hotting up since May 2020, when Amazon launched its much-awaited food delivery service in Bengaluru with trials conducted in four-pin codes, which has now been expanded to cover 62 of over 250 pin codes in Bengaluru. To add to the heat, Amazon Food charges a take rate (fees and commissions) of 10 per cent on order value from its restaurant partners, which is less than half of what Swiggy and Zomato charge – 22 to 25 per cent per on order value from their restaurant partners. Swiggy and Zomato average about 1.3 to 1.5 million orders per day.

The online food delivery market was at 75 per cent recovery compared to pre-Covid levels, at 1.8 million to 2 million orders per day in January 2021. However, it more than made up as GMV in 2021 was back to pre-Covid levels led by a 40 per cent increase in average order value from $4 to $5.5. “This increase in AOV is a result of a sharp spike in group orders which made up for the loss of single-serve lunch orders from corporates because of WFH; and an increase in orders from smaller cities,” said Rohan Agarwal, Director at RedSeer Consulting.

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