Indian food-tech aggregators are attracting investor interest, given the rise in demand for home delivery of food following the Covid-19-led lockdowns. According to data from venture capital industry tracker Tracxn, Indian food-tech aggregators secured the second-highest amount of funding from investors in the first two quarters of FY21. Indian aggregators raised four rounds of funding, compared to six rounds by aggregators in the US.
Tracxn’s data, reviewed by BusinessLine, revealed Indian food-tech aggregators raised nearly $193.55 million in this fiscal alone. Aggregators in the USraised a total of $466.66 million.
In May this year, food-tech platform Laalsa raised seed funding of $1 million from Mergen IT and angel investor Anil Ramadugu.
Swiggy too saw $1.88 million flow into its kitty as part of Series I funding from Samsung Venture Investment, to tide through the Covid-19-led pandemic phase.
A Swiggy spokesperson said that its pan-India food delivery “has recovered around 80-85 per cent of pre-Covid-19 order value. In many markets, it is at 95 per cent, and some even over 100 per cent.”
Food-tech aggregator Zomato raised two rounds in Series J funding from Kora, Tiger Global Management and Temasek. The amounts raised in the two rounds were $2,45,66,600 and $16,61,02,000.
A recent report by Zomato said that the food delivery industry has shown strong signs of recovery. It continues to grow back steadily to pre-Covid-19 levels, with the overall sector clocking about 85 per cent of pre-Covid-19 gross merchandise value (GMV), up from about 75 per cent last month.
Last year, Indian aggregators did not manage to secure any funding at all. However, in 2018, Indian food-tech aggregators such as Zomato and Swiggy managed to raise $427 million in just two rounds of funding.
So, how did an industry that did not receive any investments last year, manage to secure funding this year in the midst of the pandemic?
Abhishek Goyal, Founder & Chief Operating Officer (COO), Tracxn, explained that since people have started ordering from outside again, investors are seeing green shoots. “Earlier, in the race to get a bigger market share, companies offered heavy discounts, which has not vanished completely. (But) neither aggregators nor restaurants can afford it. (So), this is a positive trend for the industry.”
Goyal also said that since restaurants are not operating at 100 per cent capacity, the food delivery industry is booming. That is a big win for the food-tech aggregators, both in India and abroad.
Global food-tech aggregators managed to raise a total of $1.47 billion in FY21.