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Swiggy returns to fundraising; secures Series I round funding from Naspers, others

Sandeep Soni

Food ordering and delivery startup Swiggy, which skipped 2019 with no fundraising, is back with the latest update to its cap table. Zomato's arch-rival Swiggy has raised $112.5 million funding in Series I round from existing investors Naspers, showed regulatory filing. Hadley Harbor Master Investors (part of US-based investment management firm Wellington Management) and Inspired Elite Investments (a subsidiary of Chinese food delivery company Meituan Dianping) also participated in the round in exchange of 34,078 compulsory convertible preference shares. The company last raised Series H round of $1 billion from Prosus & Naspers in December 2018.

The filing sourced from business signals platform said the amount raised will be used "for general business purposes of the company." With the latest round, Naspers’ (largest shareholder) holding in the company stood at 40.56 per cent while Hadley and  Inspired Elite Investments' stood at 1.09 per cent and 6.35 per cent respectively, the document showed. The promoter's — Sriharsha Majety, Nandan Reddy, and Rahul Jamini — shareholding on a fully diluted basis was 10.18 per cent while institutional investors held 89.82 per cent of the company. Apart from the above investors, Swiggy counted DST Global, Bessemer Venture Partners, Norwest Venture Partners, Accel Partners, Saif Partners etc among its investors.

"With the current investment, Naspers continues to remain the largest shareholder in Swiggy, with a holding of 40.56 per cent on a fully diluted basis. This investment is part of Swiggy's plan to raise up to $1 billion for its food delivery and cloud kitchens business. There have been reports of SoftBank looking to invest in Swiggy, but that has not happened yet," Sonia Pradhan, Founder, said in a note.

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Swiggy had last multiple rounds every year before 2019. In 2018, it raised three rounds, two rounds in 2017, three rounds in 2016, two rounds in 2015 etc. as per deals tracker Crunchbase. The latest round comes around a month after Zomato's acquisition of UberEats India business was announced. "Swiggy is currently locked in a battle for market share with Zomato and a bunch of smaller, rapidly growing cloud kitchens businesses such as Box8 and Rebel Foods," said Pradhan. Hence, the new round will add to Swiggy's firepower to compete with Zomato in hyper-competitive online food delivery space perhaps more so in South where Swiggy is already a dominant player even as Zomato's buyout of UberEats is expected to help it strengthen its southern market.

"The positioning Zomato is looking at now is becoming more dominant in the South that they were missing earlier. South was all Swiggy while Uber was making some progress there. From an Uber perspective, this will still benefit them because they have not actually exited the market. They would want to get an upside based on an increase in valuation of Zomato," Arun Natarajan, Founder, Venture Intelligence had told Financial Express Online.

The latest round also comes weeks after Financial Express Online reported that Swiggy's earlier and existing investors Saif Partners, Norwest Venture Partners, Bessemer Venture Partners, Accel Partners and more have partially exited the company and made Rs 1,597 crore ($225 million) in returns during FY19, data from showed.