The food-tech space in India is getting spicier and spicier.
A week after Zomato had raised Rs. 1,300 crore from Alibaba, rival Swiggy has raised Rs. 650 crore from fellow Chinese e-commerce company Meituan-Dianping and South Africa-based media conglomerate Naspers as a part of its Series F funding. Two months ago, Foodpanda had been acquired by Ola, who’d committed to investing Rs. 1,300 crore into the company.
This makes the three biggest players in India’s food tech space all well-capitalized as they start off 2018. Swiggy said it would use the funding to introduce new products and service and work on its supply chain business, which included its cloud kitchen offering called Swiggy Access. “We want to continue to bring convenience, choice and reliability to our users as we fulfil our mission of ‘Changing the Way India Eats’,” said Sriharsha Majety, Swiggy’s chief executive, in a statement. “With this funding, we will further invest in building differentiated offerings, plugging the white spaces in the ecosystem, and developing our technology while keeping superlative customer experience at the core.”
India’s food tech space has seen a smart revival after a torrid 2015 and 2016, when several newly funded businesses had shut down. Even big players, such as Zomato and Foodpanda, had been affected, and had been forced to layoff employees, and employees had held TinyOwl’s founder hostage when they’d been unable to pay salaries.
But the shakeout seems to have ultimately helped the bigger companies — while the smaller companies fell by the wayside, Zomato, Foodpanda and Swiggy managed to survive the carnage, and are now looking to capitalize in a significantly narrowed field. The three companies have all managed to improve business performance last year — Swiggy and Foodpanda grew revenues faster than they grew their losses, and Zomato declared it was a profitable company.
This sets up a fascinating contest between the three biggest players in the space. Of the three, Zomato has raised the most money, $443 million, while Swiggy after this fund-raise has raised $255 million. In terms of revenues, Zomato leads with Rs. 332 crore, while Swiggy and Foodpanda follow with Rs. 133 crore and Rs. 62 crore respectively. Swiggy, though, makes the most losses — the company loses Rs. 1.54 for every rupee it earns, while Foodpanda is the most efficient — it loses only Rs. 0.72 paise per rupee it earns. Zomato loses Rs. 1.17 per rupee in revenue.
And while the three players will look to battle it out for supremacy in India’s food tech space, there’s also a dark horse — Uber Eats has been launched in India, and is quickly looking to enter markets. Uber Eats could potentially be better funded than any of these companies, and will look to grab a slice of India’s rapidly expanding food-tech market. If there were indications that the food tech sector was heating up towards the end of 2017, it’s now patently clear — food tech is piping hot, and ready for business.