India’s food delivery firms don’t only seem to have survived the coronavirus pandemic, but they seem to have emerged stronger from it.
Swiggy has raised $800 million in a few funding round, which has valued the company at $5 billion. The round saw participation from global alternative asset manager Falcon Edge Capital, Singapore-based fund management firm Amansa Capital, US-based private investment firm, Think Capital, French asset management firm Carmignac and Goldman Sachs. Swiggy was last valued at $3.6 billion in 2018.
The announcement of the fundraise was made by Swiggy CEO Sriharsha Majety in an email to Swiggy employees. “This fundraise gives us a lot more firepower than the planned investments for our current business lines. Given our unfiltered ambition though, we will continue to seed/experiment new offerings for the future that may be ready for investment later,” he wrote in the email. “The next 10-15 years offer a once-in-a-lifetime opportunity for companies like Swiggy as the Indian middle class expands and our target segment for convenience grows to 500 million users over this period,” he added.
This is quite the turnaround for food delivery companies — when the lockdown had been first announced last year, food delivery players, like many others, had been forced to completely stop operations. In July, Swiggy had fired 350 employees, and said that its business had fallen by 50%. As lockdowns had slowly eased, food delivery volumes too had slowly crept back to normal.
It’s perhaps a testament to the resilience of the food delivery space that Swiggy has managed to raise money at a higher valuation than before the pandemic. A similar story was witnessed at arch-rival Zomato — after the pandemic, its valuation rose to $3.8 billion in January, and to $5.4 billion in March this year. This bodes well for the entire space — having been forged in the fire of the pandemic when deliveries weren’t even allowed, and customers were wary of catching a deadly virus, food delivery in India has not only managed to survive, but thrive. And once the pandemic finally ends, these startups might come into their own own, and finally become large, profitable enterprises.