Food delivery startup Swiggy has become the latest entrant in the coveted unicorn club after it raised $210 Mn in a fresh funding round that was led by DST Global, which is owned by Russian billionaire Yuri Milner. Existing investors Nasper, Meituan Dianping and hedge fund Coatue also participated in the round.
The latest funding round valued Swiggy at approximately $1.2 billion, a substantial increase from the valuation of $700 Mn during the last funding round in February. Following the latest capital raising round, the Bengaluru’s total fund raising amount has now surged beyond $466 million.
The company said in a statement that it will use funds to double its technology headcounts and ramp up its supply chain operation.
The fresh funds will sharpen Swiggy’s financial muscle to compete with Alibaba backed Zomato and Foodpanda, which is now owned by cab hailing major Ola. It will also help the company in competing with new entrant UberEat.
Last year, the embattled online food delivery industry made an impressive turnaround after both Swiggy and Zomato reported improved earnings. Their improved balance sheet was the result of their aggressive cut down on the operational costs and resorting to innovative methods for customer acquisition.
While this reversal in fortune has certainly helped in reviving investor’s interest, but experts suggest that India’s online food delivery market is still not big enough to accommodate Swiggy and Zomato’s aggressive bidding for profit. In fact, analysts don’t rule out possible merger between these two companies.
Meanwhile, DST Global’s investment in Swiggy marks its third investment in India, after it invested in e-tailer Flipkart in 2014 and cab hailing major Ola in 2015. DST Global is considered one of the most high profile tech investment companies as it counts successful firms like Facebook, Airbnb and Alibaba in its portfolio.