India has got a new member in its super-elite decacorn club.
On Jan. 25, Softbank-backed food-tech firm Swiggy announced closing a $700-million funding round led by asset manager Invesco. The company said it is now valued at $10.7 billion, up from $5.5 billion, becoming the latest firm to enter India’s decacorn club.
A decacorn is a startup that has a valuation of over $10 billion.
The latest round, which saw participation from new investors such as Baron Capital Group and Kotak, among others, has come at a time of accelerated adoption of food and online grocery and a rise in consumer demand on the company’s food-delivery platform.
“While the food delivery business has nearly doubled in gross order value (GOV) in the last year, this fundraise will enable Swiggy to further accelerate growth on the core platform and make meaningful investments to grow Instamart,” the Bengaluru-based company said in its statement.
It has also hinted at making “meaningful investments” to grow its grocery delivery service Instamart.
Swiggy to take on Reliance, Amazon
The coronavirus pandemic has fuelled demand for online food and grocery deliveries in Asia’s third-largest economy, encouraging firms to widen their operations to grab the lion’s share in the sector. Recently, India’s largest private firm Reliance Industries made a $200-million bet in the quick delivery space by investing in delivery startup Dunzo. The other big players are Tata-owned BigBasket, Amazon’s Amazon Fresh, and the new unicorn Blinkit (formerly known as Grofers). Swiggy’s Instamart will reach an annualized gross merchandise value run rate of $1 billion in the next three quarters, the company has said. In the past few months, Swiggy has expanded its quick commerce grocery service to 19 cities. Genie, its pick up and drop service, is also available in at least 68 cities.
Swiggy to follow the Zomato route?
The latest fundraising round, coming six months after it raised another $1.25 billion, will help Swiggy compete with Zomato, another Indian food-tech major.
The new decacorn is also expected to follow Zomato’s path to an initial public offering this year.