Online food delivery startup and Zomato’s main rival Swiggy has scooped up $100 million (Rs 640 crore) in its largest ever fund raising round till date. The Series F fund raising round was led by existing investor and South African media giant Naspers, while a new Chinese investor Meituan-Dianping also participated in the funding round. Last year in May, Naspers also led an $80 million fund raising round in Swiggy.
However, the latest fund raising round makes for a more noteworthy observation, since it comes barely days after Zomato raised almost $200 million from Chinese e commerce giant Alibaba.
These recent funding rounds certainly indicate that the downturn in the online food industry is probably over. Owing to its wafer-thin margin and rising cost, the entire industry was going through a consolidation phase for last one and half year. The consolidation phase led to several well-funded startups like Tiny owl and Spoonjoy pulling down their shutters. But the most high profile victim of this consolidation was Foodpanda. The deep pocketed startup, which is headquartered in Berlin, was forced to sell its India business to ride hailing major Ola last year.
Currently, Zomato and Swiggy are the only two biggies left in the online food delivery industry. Both managed to keep their ship sailing during the consolidation phase by cutting down on costs and improving their profit margin.
Most industry experts argue that worst is surely over for these two companies, but claim that they can ill afford to relax if they are serious about achieving the unicorn status. Currently, both companies are approximately valued between $600 to $800. Media Reports claimed that Zomato did aim for $1 billion dollar valuation during the latest fund raising round. However, the Gurgaon headquarter startup had to settle for valuation of $760 million.