Bessemer Venture Partners plans to invest Rs 80 crore in food-delivery startup Swiggy
US-based venture capital firm Bessemer Venture Partners is in advanced talks to invest around Rs 80 crore or $12 million in food-delivery company Swiggy, according to two people aware of the negotiations. The deal, if it concludes, will value the Bengaluru-based company at around $200 million (Rs 1,350 crore), said one of the sources mentioned above.
The money will help Swiggy compete strongly with restaurant listing company Zomato, which entered the food delivery business last year, as well as the Sequoia Capital-backed Roadrunnr-TinyOwl combine and Rocket internet portfolio company Foodpanda. Swiggy’s CEO Sriharsha Majety did not reply to email queries, while Vishal Gupta, the India head of Bessemer Venture Partners did not answers questions from ET.
In June 2015, the company raised a Rs 105-crore round led by Norwest Venture Partners besides existing investors Accel India and SAIF Partners. Since the start of 2016, Swiggy has received funding of Rs 277 crore primarily from the three existing investors. Other investors include Partners Fund of Russian billionaire Yuri Milner’s DST Global, Singapore-based RB Investments and New York-based Harmony Partners.
Swiggy is present in eight cities and more than 100 neighborhoods across the country, with over 4,000 delivery contractors who are paid on a per delivery basis.
In an interaction with ET last month, Swiggy said it is doing 40,000 orders a day and the company has also seen its order value basket size increase to Rs 375 per order. Swiggy was founded by Majety, who teamed up with college mate Nandan Reddy, and IIT-Kharagpur graduate Rahul Jaimini in August 2014.
While Swiggy says it is the largest food delivery by number of orders, Gurgaon-based Zomato says it is the largest in terms of revenue given higher average order size of Rs 480. Swiggy’s model of working directly with delivery personnel is in contrast with Zomato, which says 80% of its deliveries are done by restaurants. Earlier this year, HSBC’s brokerage arm HSBC Securities and Capital Markets reduced the estimate value of Zomato by half to $500 million, while flagging concerns around its reliance on advertisement as a revenue earner, its international operations and growing competition in the online food-ordering segment.