If those layoffs and closures made you think that those glorious fundraising days of the food delivery segment are all but gone, Swiggy will make you think again. The online food ordering startup has landed a massive $35 Million round, led by existing investors SAIF Partners, Accel Partners and Norwest Venture Partners, taking the upstart’s valuation to well over $100 Million.
Apart from the company’s existing investors, a clutch of new investors have also invested in this round, which includes RB Investments, Harmony Partners and Russian billionaire Yuri Milner’s DST Partner Fund.
According to Swiggy’s CEO, the newly raised capital will be utilized to hire experienced senior management team members, strengthen its technology, and build its brand.
Founded by Sriharsha Majety and Nandan Reddy, along with ex-Myntra developer Rahul Jaimini, Swiggy started its operations in August 2014. Earlier, the company had raised $16.5 million in a Series B round of funding. Prior to that, it had received $2 million in Series A round from SAIF Partners and Accel, taking the total amount raised to a staggering $53 Million.
With an average order size of Rs 300, our unit economics are healthy and we don’t depend on discounts to increase orders.
said Sriharsha Majety, co-founder and CEO of the company.
Currently, the Bangalore based startup claims to be delivering 20,000 orders and is growing 25% every month. The company is expecting to turn in operating profits in two cities – Bengaluru and Hyderabad by April 2016. Swiggy is live now in eight cities — Bangalore, Gurgaon, Hyderabad, Delhi, Mumbai, Pune, Kolkata and Chennai — with some 5,000 restaurants on its platform and approaching 1 million orders each month. And while those are big numbers, they are relatively small when compared to the likes of the bigger players in this segment. With $35 Million in bank though, Swiggy will soon reach that zenith.
The company is also aiming to register a seven-fold increase in business from the eight cities it is operating in now. To fulfil orders and delivery services, the company has partnered with close to 3,000 delivery boys on a pay- per-delivery model. Swiggy charges around a 15%-25% commission to restaurants currently and for smaller orders it will charge extra to users.
Sumer Juneja, Director at Norwest Venture Partners, said,
Economics of Swiggy are improving month on month, as with higher order volumes and city wise density the company has been able to become more relevant to restaurants and increase the commission steadily. Consumers have also started to pay for their timely deliveries.
Swiggy has been coming up with many new partnerships and solutions to boost revenues and differentiate itself from the rest. It has also announced to set up cloud kitchens, which serves the purpose of preparing food for incoming orders, with no dine-in facilities. Recently, it also announced partnership with BurgerKing and will take care of their logistics for all 23 outlets in India.