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Swiggy raises an additional USD 1.88 million from Samsung Ventures after recent layoff

Swiggy has asked 1,100 employees to leave, giving them three months notice period and other severance packages.

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Over a month after raising USD 43 million in its ongoing Series I round of funding, Bengaluru-based food delivery giant Swiggy has further raised USD 1.88 million from Samsung Ventures.

According to its regulatory filings sourced by local news website Entrackr, Samsung Ventures has put in a total of USD 7.5 million in Swiggy for a 0.24% stake. Chinese social media and gaming giant Tencent Holdings owns a 5.89% stake in the company for a total investment of USD 18.8 million. South African conglomerate Naspers which backs Tencent is the largest investor in Swiggy with about USD 100 million for a stake of 40.6%.

With the current funding round, Swiggy, which holds the largest market share in India’s food tech market estimated to reach USD 8 billion by 2022, has raised a little over USD 1.6 billion till date.

Its Series I round of funding started in February when it raised USD 113 million in the first tranche led by its existing investor Naspers with participation from Chinese on-demand services giant Meituan Dianping and Boston-based investment firm Wellington Management Company.

The fresh investment news comes at a time when the company just announced laying off 1,100 employees owing to the slowdown food tech and restaurant industries is experiencing due to the novel coronavirus.

In his note to the employees, Swiggy co-founder and CEO Sriharsha Majety said, “While we are very fortunate to have raised capital just before Covid hit and have sufficient runway today, it is incredibly important to prepare for worse scenarios in the macro environment and make sure we are protected.”

The additional funding will help the company to stay afloat while it takes different measures to remain relevant at a time when food tech industry is seeing one of its worst days. Majety in his note said Swiggy would shut down a few business operations and scale down its cloud kitchen business. “We also need to build a much leaner org [organization] and reduce costs to be able to withstand any further risks from the uncertainty.”

Apart from Swiggy, its rival Zomato has also laid off 13% of its total employee size in India.