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Korean electronics giant Samsung might back Indian food delivery unicorn Swiggy

Samsung Venture kicked off investments in India in July 2019 and plans to invest in 100 startups over the next five years,

Photo by Frank Vessia on Unsplash

Homegrown online food ordering and delivery unicorn Swiggy may get Korean electronics conglomerate Samsung on its cap table.

The investment arm of the Seoul-headquartered smartphone giant, Samsung Venture Investment Corporation (SVIC), is in advance stages of discussion with the Bengaluru-based food-tech startup to invest USD 7-10 million in the latter’s ongoing Series I round, local media Economic Times (ET) reported.

Last week, Swiggy raised USD 113 million in a Series I funding round led by its existing investor South Africa-based internet conglomerate Naspers, with participation from Chinese on-demand services giant Meituan Dianping and Boston-based investment firm Wellington Management Company.

These latest investments are a part of a larger USD 150 million round, which values the company at nearly USD 3.6 billion. Although, Swiggy’s valuation has remained pretty flat since December 2018, when it had raised USD 1 billion from Naspers, Tencent, Hillhouse Capital, and Wellington Management Company at a valuation of USD 3.3 billion. At present, Naspers is the largest investor in Swiggy with a 40.6% stake.

The funding comes at a time when its arch-rival Zomato has gained strength in Swiggy’s strong market—south Indian cities—after acquiring the common competitor, Uber Eats India. Alibaba-backed Zomato is also refueling its tank with an ongoing USD 600 million funding round from Ant Financial. With fresh funding coming in from new and existing investors, the two food-tech unicorns are now locked in a fierce fight for India’s soon-to-be USD 17.02 billion food-delivery-market.

As a part of its strategy to move towards profitability and better unit economics, Swiggy has been focusing on cloud kitchens—delivery-only kitchens—and has made several strategic partnerships with restaurateurs in this aspect. The company has plans to invest USD 10.5 million in its cloud kitchen business called Swiggy Acces.

Samsung Ventures, which manages assets of about USD 2.2 billion globally, has been making investments in the country since July 2019, with an initial bet worth USD 8.5 million across four early to growth-stage startups. Till now, it has backed a handfull of early-stage technology companies. Last year it had said it plans to make bets in about 100 more startups over the next five years. Deciding to invest in Swiggy is a big move for the venture fund in India, as so far, it has been making strategic investments in lesser-known companies only. If the deal with Swiggy goes through, it will be its first investment in a unicorn company in the South Asian nation.

SVIC counts system apps company OSLabs (Indus OS), speech technology startup Gnani.ai, IoT solutions provider Silvan Innovation Labs, and online furniture renting platform Rentomojo, among others, as its portfolio companies. Samsung Venture recently co-led a USD 14 million (INR 100 crore) round in Stelling Technologies, which owns and operates inter-city mobility startup IntrCity by RailYatri.