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Red-hot Indian online food sector delivers second unicorn amid Naspers-led fund drive

Jun 21 2018 14:31
Saritha Rai, Bloomberg

Indian startup Swiggy has raised $210m in a round led by Naspers [JSE:NPN] and investment house DST Global, setting a stage for a battle between well-funded players in the sizzling food-delivery sector.

The financing values the four-year-old startup at well over $1bn, according to people familiar with the deal. That makes Swiggy the second unicorn to emerge from the segment, said the people, who asked not to be identified discussing private details, after New Delhi-based Zomato.

Start-ups that specialise in delivering all-time favourites from paneer tikka to mutton briyani have snagged at least half a billion dollars in financing this year from some of the world’s largest internet investors and companies.

Zomato received $150m in February from billionaire Jack Ma’s Ant Financial, while Swiggy’s latest round comes on the heels of a $100m financing in February that was also led by Naspers.

Its valuation has jumped by over a third in the course of a few months, said one of the people familiar with the deal.

New investors this time included DST and Coatue Management, joining existing backers Naspers and Meituan Dianping, the Chinese food-delivery juggernaut. The start-up said it would use the funds to improve its supply chain and technology while expanding into new markets.

Bangalore-headquartered Swiggy already lists 35 000 restaurants and 40 000 delivery people across 15 cities.

The revival of interest in online food ordering began last year when Uber introduced UberEATS across the country. That same year, domestic rival Ola acquired FoodPanda’s local operations and pledged $200m to the unit.

That’s a remarkable turnaround from just a couple of years ago, when investors around the globe wrote off the sector, drying up capital and forcing dozens of start-ups to shut.

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