Swiggy is eyeing South Korean funds to acquire a $500 million funding

Key Highlights

These funds include Mirae Asset Management, STIC Investments, STIC Investments and Korea investment Partners.

There is a secondary share sale in talks as well. Details of that are still being worked out.

This new funding is all set to increase the online food delivery company’s valuation to $4 billion which is up from $3.3 billion that it was valued at earlier.

Bangalore based online food delivery app Swiggy is reportedly in talks with various South Korean funds to secure funding worth $500 million. These funds include Mirae Asset Management, STIC Investments, STIC Investments and Korea investment Partners. This new funding round is going to be led by Naspers, a South African internet giant. This company owns a stake of 36% in Swiggy along with Tencent.

There is a secondary share sale in talks as well. Details of that are still being worked out. This new funding is all set to increase the online food delivery company’s valuation to $4 billion which is up from $3.3 billion that it was valued at earlier.

Related : Swiggy partners with a Kerala jail to deliver Biryani cooked by the inmates to its customers.

This investment is extremely crucial for the food delivery aggregator since it has been locked in discount war with its rival Zomato. Both of these companies fulfil over a million orders per day. These companies have been going through almost $40-50 million per month in a bid to acquire new customers. The food delivery sector is infamous for burning up cash as it relies heavily on discounting to attract new customers.

Swiggy is still in the process of expanding its reach all across India. It mainly wants to focus on smaller towns and cities. Also, the company wants to dip its toes beyond the food delivery sector. The new services that are set to be started by the firm include Swiggy stores, a concierge service, Swiggy daily, a service that offers home-cooked meals to its users and Swiggy access, a cloud kitchen business.

Swiggy is mirroring the strategy of Meituan- Dianping, China’s biggest food delivery network which also invests in the company. It launched a 24 HR grocery delivery business called Flash order in 2017.

Related : Swiggy to launch Swiggy Daily for home-style food in subscription only mode

In fact, Food delivery players all over the world are entering new markets to optimize fleet costs.

In December 2018, Naspers had invested about $1 billion in Swiggy in collaboration with Hillhouse Capital, China’s Tencent and Wellington management. A secondary sale conducted by earlier investors Accel Partners and SAIF partners made up $200 million of this entire round. A similar secondary transaction is reportedly part of this new finance round as well.

Both Swiggy and Zomato have been in talks with Softbank for larger investments over the years. However, Softbank is said to be watching the online food delivery space very closely. It is still not sure which of the company is the market leader in this sector and hence a better investment. The company has been suggesting that the two companies combine their forces. This suggestion was backed by Alibaba who is Zomato’s chief investor till about a year ago.

Earlier, Vivek Sunder, Swiggy’s COO had said that he expects his company to see growth due to customer repeats by the top 50 million users of the internet. The company is all set to expand their restaurant selection and scale up their products including their loyalty programme Swiggy SUPER, Swiggy Daily, meals that serve a single person and Launchpad, a campus programme for students    

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