Online food order and delivery major Swiggy is learnt to be in talks with a clutch of investors to explore raising around $500 million. This comes amid on-going competition with rival Zomato to acquire and retain loyal customers. Swiggy has chalked out certain plans to broad-base its business as well, through entering synergistic services like grocery deliveries etc.
According to an Economic Times report, the investor to pick a major portion of this $500 million ticket could be Korea Investment Partners, a South Korea-based investment company. Apart from this investor, Mirae Asset Management, STIC Investments and Neoplux are the other investors being engaged in discussions for investments.
One of the significant aspects of this investment round would be the enhanced valuation of Swiggy from $3.3 billion to around $4 billion. Naspers of South Africa is the major existing investor in the startup with 36% equity with the other key investor being Tencent. The fresh infusion of $500 million may be worked out through a mix of primary and secondary equity.
The funds will be used by Swiggy for multiple purposes, expanding its geographical footprint adding more cities and towns being serviced and also in the new products or offerings that it plans to add up to its present spread. There is the regular cash burn as well, which is estimated at around $40 to $50 million every month.
Swiggy and Zomato have to however contend with the resistance being put up by the body of restaurants which have approached the central government with the complaint that the deep discounting offered by these online startups tantamount to unfair trade practice. The government has for now asked the factions to sort the issue out among themselves.