Swiggy is taking entrepreneurial aggression to all new level. Not even 24 hours have passed since it announced the acquisition of troubled startup Scootsy, now buzz is that Swiggy is in talks to raise additional funds. Reports claim that the Bengaluru headquarter food delivery company is in serious talks with several investors to raise funds at a market valuation of whopping $2.3-2.5 billion.
Sources close to the matter have not been able to confirm how much Swiggy is really aiming to raise through this latest round. But they have confirmed that Japanese investment giant Softbank and equity firm General Atlantic are currently among the investors that the food delivery company is currently holding talks with.
To say that Swiggy is on a fundraising steroid would be an understatement, especially considering that the company has already raised two fund raising rounds this year. Its last fundraising round that took place in June had propelled the startup to the coveted unicorn club.
Zomato & Swiggy are burning cash at incremental rate
Intense competition seems to be taking huge toll on Zomato and Swiggy, both of whom are literally breathing down in each other’s neck. Industry experts claim that both incumbent market leaders are burning cash at an exponential rate in pursuit to chase the pole position.
This pole position would indeed be a price catch for both companies, considering that India’s food delivery market is expected to be triple the size by 2023. A company with no 1 market position would enjoy fatter revenue and profit and will be able to offer handsome exits for all its strategic investors.
Zomato, which this year has raised only one funding round, is certainly not taking the on-going battle easy by any means. If top sources are to be believed, the Gurgaon based startup is pushing hard to raise another round of funding. Interestingly, one of the common investors that both companies are incessantly chasing is SoftBank. Reports claim that both companies are playing hard ball to bring SoftBank on the board.
The entire episode as to to whom will the Japanese investment giant swing to is indeed playing like a suspense story.
And there is lot more cooking beyond Zomato and Swiggy
Zomato and Swiggy may be the incumbent market leaders, but today there is lot more cooking in India’s foodtech service sector beyond these two companies. This is mostly thanks to cab hailing giants Ola and Uber, which are the latest entrants in the foodtech market. Ola entered the market last year by acquiring FoodPanda’s India business, which is the costliest acquisition for the cab hailing company till date. Uber, on other hand, has launched UberEat in selected Indian cities.
But it is FoodPanda that seems to be taking the battle in food delivery market lot more aggressively. Rumor mills are buzzing with the report that Ola is currently in talks with multiple investors to expand its food delivery business.
Not to mention Ola is reportedly in serious talks to acquire defunct delivery startup Holachef.