After reports that SoftBank was in talks with Swiggy, among other investors to invest in the FoodTech major, Economic Times now reports that the Japanese investor is exploratory talks to invest in Swiggy’s rival Zomato.
It was reported in November 2017 that SoftBank was in talks to invest nearly $250 million Swiggy, but no announcement followed yet. ET quotes sources as saying that Swiggy feels like it is still early to get funded from SoftBank.
In the case of Zomato, while talks are still in preliminary stages, SoftBank reportedly discussed business metrics across Zomato’s three main businesses and more specifically around Zomato’s international expansion.
After infusing funds into Ola, Flipkart, Paytm Mall, SoftBank seems to now be eyeing the FoodTech market in India, which has been fast gaining steam over the past year. The industry, which saw investor interest dry up around 2015-16 followed by several startups shutting shop, 2017 has been a turnaround year for the foodtech market.
According to RedSeer consulting, foodtech sector saw a 125% increase in order volumes to reach 4.5 lakh orders per day, which is more than double the numbers it saw in 2016.
The Foodtech market is dominated by Swiggy and Zomato, followed by players such as FoodPanda and UberEATS.
Swiggy is reportedly on the verge of closing a roughly $250-million round led by DST Global and Naspers. US-based hedge fund Coatue Management and existing Chinese investor Meituan Dianping are also expected to participate. Swiggy last raised $100 million in February 2018 in a round led by Naspers.
Zomato, which has been aggressively growing its food delivery arm to take on Swiggy also raised funds in February when Alibaba’s Ant Financial pumped in $200 million, giving Zomato a unicorn status.
A testament to the opportunity in this industry also was the entry of UberEats last year. UberEats is currently present 13 cities in India withs over 12000 restaurant partners on board. Ola too cashed in on the growing opportunity and acquired Indian operations of FoodPanda last year.