Swiggy is all set to reach a market cap of $5 billion with the latest funding raise of $450 million from SoftBank. As per the Economic Times report, the online food delivery giant is in advanced talks with SoftBank to close the current funding round. SoftBank took the investment decision after having a close watch on Swiggy operations in the last few years.
Swiggy CEO Sriharsha Majety also announced an $800 million financial round two weeks back with a common mail to its employee. The current discussion with SoftBank is an extension to the $800 million funding announcement done by Swiggy CEO.
Swiggy’s Latest Funding Rounds Details
SoftBank was keeping a close watch on the food delivery industry for the last few years, as reported by a person familiar with the development. Finally, the SoftBank Vision Fund research team found that it is worth investing in Swiggy, an online food delivery firm in India.
The source further revealed that the current SoftBank investment will take Swiggy valuation to a whopping $5 billion. A few weeks back, Swiggy CEO also announced a financial round discussion with existing and new investors. When asked about the link between these two funding rounds, an insider person told to ET that the SoftBank funding round is an extension to what Swiggy CEO announced earlier.
Swiggy arch-rival Zomato is all set to start its IPO very soon with a total funding raise of $1 billion last year. Current SoftBank funding will also boost Swiggy operations further and it will keep the Indian Startup in close competition with Zomato.
SoftBank is also a major investor in Zomato. When asked about the reason why the firm is interested to invest in Swiggy, a person said:
“Masayoshi Son ( SoftBank founder) had engaged with both the companies last month as they wanted to finally take a bet on the food-delivery sector… SoftBank has now decided to back Swiggy as it is looking to expand into more than food delivery.”
Swiggy has recently expanded its operations to deliver home essentials to its customers. It is an attempt to diversify the operations.
Swiggy Recovery and SoftBank’s Interest in Food Delivery Firms
SoftBank took a strategic decision to invest in Swiggy and the online food delivery sector after finding the IPO success of DoorDash. Uber Eats growth during the lockdown is another factor about SoftBank’s investment in the food delivery sector. GoPuff, a portfolio company of SoftBank, also saw a surge in its valuation from $3.9 billion to $8.9 billion. GoPuff is also an instant online delivery app.
Talking about the SoftBank investment in Swiggy, insider person further added:
“The Covid-19-led momentum for delivery platforms has been a big factor in SoftBank wanting to pick a company in India as well. This was one big sector they had stayed away from all this while.”
Swiggy CEO talked about the recent recovery after the pandemic. He looked positive about Swiggy growth in the future. He said:
“Over the last one year, thanks to all your efforts, we’ve managed to drive a strong recovery in the food delivery business with a very clear path to profitability. The food delivery business is the strongest it has ever been, and we are now well on our way to drive continued growth over the next decade.”
When contacted, Neither Swiggy nor SoftBank replied to any query related to the latest funding round discussion.