Japanese corporation SoftBank is reportedly planning to invest in one of India’s two foremost food delivery companies, Zomato and Swiggy. According to sources close to the matter, Zomato’s talks with Softbank Vision Fund has advanced further than Swiggy’s and it could probably raise at least $500 million in the funding next round.
If SoftBank decides to invest in Swiggy, India’s biggest food delivery brand could also end up raising nearly $500 million, the sources further mentioned. If the new funding round goes through, Swiggy’s value could surpass $2 Billion, a 54% boost from its current $1.3 billion valuation.
Records indicate that SoftBank had been evaluating Swiggy for almost a year, while both parties had failed to reach an agreement during the last two funding rounds. If the ongoing discussions result in an agreement, SoftBank may become Swiggy’s largest shareholder.
Swiggy, run by Bundl Technologies, has already raised $310 million in 2018 from a slew of investors including DST Global and Naspers, as per records. Zomato Media Pvt. Ltd has in turn received $150 million in fresh capital in February from Ant Small and Micro Financial Services Group.
Although both companies are well-capitalized, experts believe they need to keep raising more funds to capture shares in a tough market. Both the companies are allegedly spending hundreds of crores to lock in on delivery staff, along with increased spending on discounts and deliveries. The online food delivery market is expected to grow from $700 million in 2017 to $4 billion in 2020, an industry report estimates.
Delivery staff employed at start-ups like Swiggy and Zomato have experienced a significant hike in their incomes over the last six months as the companies compete to win a bigger foothold in the fast growing food-delivery market. So far, Swiggy has raised the most capital among all online food delivery services, which amounts to $465 million, whereas Zomato raised about $375 million itself, records confirmed.