ET BureauBENGALURU: Swiggy has raised an additional Rs 47 crore from existing investors Norwest Venture Partners, DST Global and Accel Partners, valuing the online foodordering startup at over Rs 865 crore or $130 million, filings with the registrar of companies show.
The new round of funding gives the startup additional horsepower to go deeper into its core eight cities and maintain its market leadership position as it competes with other startups including Zomato and Runnr, to be formed after the merger of Roadrunnr and TinyOwl.
Swiggy founders refused to comment on the current round.
“As the market leader, our goal is now to create defensibility around the brand with superior experience for both customers and restaurants,” said Nandan Reddy, cofounder of Swiggy, in an interview on Friday.
Reddy explained that the company’s live order-tracking within the app, acceptance of orders without any minimum order size and ownership of fleet are its few differentiators which help them maintain customer repeat rate and differentiates the ordering experience from its competitors.
Swiggy is fulfilling close to 40,000 orders from the eight cities that it operates in including Bengaluru, Hyderabad and Delhi-NCR.
Over the past few months, the company has also seen its order value basket size increase to Rs 375 per order. Close to 30% of these orders are cashless, sources told ET.
“We charge our partner restaurants for both lead generation as well as delivery at 25% of the overall order,” said Reddy. But Zomato, which started out as a restaurant-discovery platform before moving into delivery last year, claims that it is the largest player as it has a higher average order value of Rs 550-600. The Gurgaon-based company said in its blog on Monday that it made 33,000 orders on Sunday, May 8.
According to Mukul Arora, principal at SAIF Partners, Swiggy’s offering is differentiated from its competitors, which helps the startup command a higher commission from restaurants and therefore build a sustainable business.
SAIF is an early investor in the company. “A restaurant will pay Swiggy a commission for bringing the order, just like it pays other marketplaces, and in addition, it will pay Swiggy for delivery. Therefore, Swiggy’s revenue per order is significantly higher than other marketplaces, which focus on only one of the two aspects,” he said.
Investors and industry experts say, bowing to few high-quality commercial real estates in India, lion share of the growth will be taken up by ordering in instead of dining out. At the same time, keeping into account that only close to 3% of the market is organised, it becomes tough for individual restaurant owners to maintain good-quality delivery experience in a sustainable manner. Sriharsha Majety, teamed up with college mate Reddy, and IIT-Kharagpur graduate Rahul Jaimini,to set up Swiggy in August 2014. In January, Swiggy had raised $35 million (Rs 230 crore) led by internal investors SAIF Partners, Accel Partners and Norwest Venture Partners.
The new round of funding gives the startup additional horsepower to go deeper into its core eight cities and maintain its market leadership position as it competes with other startups including Zomato and Runnr, to be formed after the merger of Roadrunnr and TinyOwl.
Swiggy founders refused to comment on the current round.
“As the market leader, our goal is now to create defensibility around the brand with superior experience for both customers and restaurants,” said Nandan Reddy, cofounder of Swiggy, in an interview on Friday.
Reddy explained that the company’s live order-tracking within the app, acceptance of orders without any minimum order size and ownership of fleet are its few differentiators which help them maintain customer repeat rate and differentiates the ordering experience from its competitors.
Swiggy is fulfilling close to 40,000 orders from the eight cities that it operates in including Bengaluru, Hyderabad and Delhi-NCR.
Over the past few months, the company has also seen its order value basket size increase to Rs 375 per order. Close to 30% of these orders are cashless, sources told ET.
“We charge our partner restaurants for both lead generation as well as delivery at 25% of the overall order,” said Reddy. But Zomato, which started out as a restaurant-discovery platform before moving into delivery last year, claims that it is the largest player as it has a higher average order value of Rs 550-600. The Gurgaon-based company said in its blog on Monday that it made 33,000 orders on Sunday, May 8.
According to Mukul Arora, principal at SAIF Partners, Swiggy’s offering is differentiated from its competitors, which helps the startup command a higher commission from restaurants and therefore build a sustainable business.
SAIF is an early investor in the company. “A restaurant will pay Swiggy a commission for bringing the order, just like it pays other marketplaces, and in addition, it will pay Swiggy for delivery. Therefore, Swiggy’s revenue per order is significantly higher than other marketplaces, which focus on only one of the two aspects,” he said.
Investors and industry experts say, bowing to few high-quality commercial real estates in India, lion share of the growth will be taken up by ordering in instead of dining out. At the same time, keeping into account that only close to 3% of the market is organised, it becomes tough for individual restaurant owners to maintain good-quality delivery experience in a sustainable manner. Sriharsha Majety, teamed up with college mate Reddy, and IIT-Kharagpur graduate Rahul Jaimini,to set up Swiggy in August 2014. In January, Swiggy had raised $35 million (Rs 230 crore) led by internal investors SAIF Partners, Accel Partners and Norwest Venture Partners.
Get Unlimited Access to The Economic Times
