India’s newest unicorn is wading into new waters.
On Feb. 22, food tech major Swiggy made its maiden startup investment by plowing Rs31.2 crore ($4.4 million) into Mumbai-based ready-to-cook food company Fingerlix. This gives Swiggy rights to about 9% of shares in Fingerlix, according to regulatory filings sourced from data intelligence firm Paper.vc.
“Fingerlix has built a much-loved brand with a unique model of creating products which we believe will unlock a new category of convenience for customers,” Vivek Sundar, COO of Swiggy, told Quartz in response to an e-mail query.
Founded in 2015, Fingerlix serves a range of ready-to-cook dals, curries, and parathas among other things, clocking about Rs12 crore in annual revenue. It currently operates in Mumbai, Pune, Delhi NCR, Bengaluru, Hyderabad, and Chennai. The startup competes with other ready-to-cook food providers such as iD Fresh and MTR.
Swiggy’s investment is part of an ongoing series C investment round where Fingerlix is expected to raise about Rs63 crore, as per additional filings submitted to the registrar of companies (RoC). Fingerlix raised Rs8.5 crore in March last year from Alteria Capital, which is also an investor in Swiggy. In 2017, the startup had raised Rs21 crore in series A funding from Zephyr Peacock, followed by Rs45 crore from Accel Partners.
The investment opens up opportunities for Swiggy to play a new segment beyond just its food delivery business.
Analysts believe that the investment is a clear indicator of Swiggy eyeing horizontal expansion.
“Swiggy focused and got its logistics right as a foundation. Now it is stacking up the base with relevant services. It continues to invest in improving supply chain and logistics, which will help the company support new services,” said Satish Meena, a senior analyst at Forrester Research.
The Bengaluru-based unicorn has been on a roll ever since it raised a whopping $1 billion in December last year. It has since acquired artificial intelligence startup Kint.io which applies deep learning and computer vision for object recognition in videos. Kint.io is Swiggy’s fourth acquisition.
This year, the company is leveraging its acquisitions to launch new verticals. On Feb. 12, it piloted Swiggy Store for delivery of goods from kirana stores and expanded into milk and daily essential delivery.
“Ready-to-eat food is fast emerging as a significant segment given the changing lifestyles of urban millennials. The current round will help us address this emerging consumer segment via multiple channels,” Nadkarni said.