Swiggy, the online food-delivery platform owned by Bundl Technologies Pvt. Ltd., raised $15 million in Series D round of financing from Bessemer Venture Partners, and existing investors such as Accel Partners, Norwest Venture Partners, SAIF Partners and Apoletto Asia. The company’s funding after Series D stands at a walloping $75.5 million, second only to Zomato’s $224 million in the list of homegrown online food-delivery platforms.
Swiggy had raised $42 million in a Series C funding round in two tranches from a consortium of new and existing investors. The first installment of $35 million saw participation by all existing investors and two new ones: Harmony Partners and RB Investments. The second installment of $7 million came from Apoletto Asia, Accel Partners and Norwest Venture Partners.
The recent infusion of funds would ensure that Swiggy can continue to take on the likes of Zomato, FoodPanda, RoadRunnr, etc. by investing in customer relationship experience, technology upgrades, a wider selection of restaurants, and delivery efficiency. The greatest challenge confronting the food-delivery domain is the size of the order. According to an article on Livemint, the average order value of food in the U.S. is around $20, about four times more than the mean of Rs. 300 (about $4-5) in India. As an outcome, food-delivery firms in India, which charge clients a commission of 10-20% of the order value, are on the losing side as each delivery costs about Rs.50. On the flip side, only 2% of the food ordering market are online; hence, there is enormous untapped potential to engender revenues and garner market share for online food-delivery platforms.
To stay at the forefront of the competition, Swiggy has come up with some exciting innovations. In Bengaluru, they are piloting “Swiggy Express” which purports to deliver in-house chef prepared meals in less than 20 minutes. It also provides clients with an option to pre-order meals. To make a quick buck, Swiggy introduced ‘surge pricing’ – just like how it works on cab-aggregation platforms. Overall, such initiatives are expected to boost the number of customers; they also reflect the need to churn out a profit at the earliest due to pressure from investors.
“We are excited about the funding as this is a validation of our performance and recognition of our leadership, in addition to being a testament to the tremendous potential of the food tech sector” Sriharsha Majety, co-founder and chief executive at Swiggy, said in a statement. He also iterated that, “Our strong growth in the last few months shows that our customers are increasingly becoming accustomed to a new behavior of ordering food for the experience, rather than only for convenience.”
Swiggy is a major player in the very competitive online food-delivery platforms. Any increase in funding amount of one competitor (like FoodPanda, Zomato, etc.) reflects the optimism the investors have of food-ordering business. With this infusion, Swiggy has been furnished with teeth to entail further proliferation of its operations. Watch out, Zomato and FoodPanda!