Bengaluru-based food delivery major Swiggy is in advance stage of discussions with Qatar Investment Authority, Falcon Edge, and Singapore’s GIC to raise around USD 800 million.
Local media Economic Times citing sources said, if the deal goes through the company’s valuation would rise to USD 5 billion from its last valuation of USD 3.7 billion when it raised USD 158 million last year.
Swiggy’s current funding round comes at a time when its arch-rival Zomato is set to go public in a few months and has even started preparing for it. Earlier this month, Zomato increased its paid-up capital from INR 535 crore (USD 73.5 million) to INR 1,448 crore.
Zomato is looking to list itself in India and reportedly plans to raise USD 6 to 8 billion during IPO. The Gurugram-based company recently raised USD 660 million and is in talks with investors to raise USD 500 million in a pre-IPO round of funding seeking a valuation of USD 5.5 billion. With the fresh capital coming in, Zomato would have USD 1 billion in cash ahead of its public market debut.
Food delivery sector was hit last year during the pandemic as most restaurants remained shut for the good part of the year. While both the companies’ daily order volume plummeted, they saw a marginal rise in orders by the latter half of the year due to three-month-long festive period which coincided with Indian Premier League, a major sport event in India.
An industry insider told KrASIA that both the companies are seeing a slight rise in monthly orders in terms of value but total order numbers have still not reached pre-COVID-19 days.
In its financial report for FY 20, Zomato said, “Covid-19 pandemic…brought down the order volumes significantly and also caused huge reduction in dine out revenue.”
While Zomato’s gross merchandise value (GMV) of its food delivery business has reached 110% of the pre-COVID-19 number in September, the company said there are still millions of customers who haven’t yet ordered since the beginning of the lockdown.