ADVERTISEMENT

What Does SoftBank’s Investment Mean for Swiggy?
W

Masayoshi Son's Vision Fund II has made aggressive bets in India this year. It is now looking to add food-delivery tech to its portfolio by investing 450 million USD in Swiggy's series J funding round.

SoftBank, a Japanese conglomerate’s Vision Fund II, SVF2, has sought approval from the CCI, Competition Commission of India, to invest in food delivery company Swiggy (1).

The Masayoshi Son-led investment firm has made aggressive bets in India in 2021. It is now looking to invest in a food delivery unicorn, its first bet in the Indian food-tech space.  

Earlier, Swiggy had secured close to 158 million USD as part of its series I round in April 2020, which saw participation from Tencent, Prosus NV, Ark Impact, Meituan Dianping, Korea Investment Partners, and others. 

In April, Swiggy had secured over 343 million USD as a part of its Series J funding round via a slew of investors. It is part of the 800 million USD funding round, which would value the startup close to 5 billion USD (2). 

Reportedly, there are reports that SoftBank Group Corp. is in talks to invest 450 million USD in the food delivery company at a 5.5 billion USD valuation. 

SVF2 has offered a competitive assessment of its online ads and digital payment businesses as per the CCI document. 

The investment firm stated in the document, “the activities of the parties don’t exhibit overlaps in India’s any plausible relevant market in India. Hence, the proposed combination won’t lead to any change in the competitive landscape. Nor will it cause any appreciable adverse effect on India’s competition.”

Notably, a CCI nod is necessary for the deal as SoftBank has investments worldwide in companies in the same space and Grofers, which competes with Swiggy’s Instamart, on-demand grocery delivery sector. 

SoftBank’s interest in India’s food-tech space is not new. There have been speculations for years whether it will back Zomato or Swiggy. Zomato appeared to have an edge a few years ago after purchasing UberEat, which gave Uber, SoftBank’s portfolio company, a stake in the merged company. 

Additionally, Alibaba’s Ant Financial, another early bet of Masayoshi Son, is also a backer of Zomato.

It is also interesting to highlight that Sumer Juneja, who leads investments for SoftBank India at present, used to be on Swiggy’s board a few years back when he was with Norwest Venture Partners, one of Swiggy’s early backers. 

SoftBank’s bet on Swiggy also came when it witnessed a huge success in global investments like DoorDash. Its 680million investment in DoorDash was worth over 11.5 billion USD when it went public in December 2020 (3).

The Rivalry in Indian Foodtech Market

The new investments came amid Zomato raising 910 million USD in recent months as it prepares for an IPO this year. The last funding round valued Zomato at 5.4 billion USD. And during Zomato’s fundraise, the company stated that it is securing money to partially fighting off “any price wars or mischief from competition in several areas of business.”

A third player, Amazon, had also entered the Indian food delivery market last year. However, its operations are still limited to some parts of Bangalore.

Nonetheless, according to analysts at Bernstein, the Indian food delivery market will be worth over 12 billion USD by 2022. 

After securing 800 million USD, Sriharsha Majety, Swiggy CEO and Co-founder, told employees in a memo that the new funds give the company a lot more firepower than the planned investments for their current business lines. Considering our unfretted ambition, however, we will keep experimenting with new offerings for the future that may need investment later. We will need to relentlessly invest and execute in the future to create an enduring iconic firm out of India. 

He further added that the long-term goal for the company is to serve 500 million users in the upcoming 10 to 15 years, hinting at Meituan, a Chinese food giant, which had over 500 million transacting users last year, currently valued at over 100 billion USD (4).

“We are coming out of a difficult phase during the previous year considering the pandemic and have weathered the storm. However, everything we do from here on requires us to maximize the chances of our success in the long-term,” said Majety.

While Zomato is centered on the food delivery space, Swiggy is also betting big on its Swiggy Genie, a hyperlocal delivery service, which competes with Flipkart, Dunzo, and Amazon. It also offers Swiggy Instamart against players like BigBasket, JioMart, Amazon, Flipkart, and Grofers. While Swiggy Genie is active across 65 cities, its grocery delivery started with Bengaluru and Gurgaon.

Swiggy, which considers Prosus Ventures among its most prominent investors, laid out some staff last year, as did Zomato. It also scaled down its cloud kitchen efforts as an attempt to stay afloat during the coronavirus pandemic, which had prompted India to enforce a nationwide lockdown (5).

SoftBank Vision Fund 2 also invested in Zeta, a banking tech startup at over 1 billion USD valuation (6). The investment firm, which has also poured capital in Flipkart, Ola, and Oyo, also backed Meesho, a social commerce platform, earlier this year (7). According to reports, OfBusiness, a Gurugram-based B2B marketplace, is in talks with SoftBank to secure 100 to 150 million USD at a 1.2 billion USD valuation, making it India’s latest unicorn.

Meanwhile, Paytm, India’s digital payments giant is getting its wheels rolling for its IPO, scheduled for November this year. SoftBank is likely to capitalize approximately three to five percent of its shareholdings in the company.

+ posts

Rucha Joshi, currently managing a team of over 20 content writers at TimesNext is fueled by her passion for creative writing. She is eager to turn information into action. With her hunger for knowledge, she considers herself a forever student and a passionate leader.

Disclaimer: The views, thoughts, and opinions expressed in the article have been curated for our audience and does not warrant a 100% accuracy. All the information mentioned in the article is subject to change according to the changing viewpoints. Feel free to reach us at [email protected] for any change or copyright issues.

Note: If you buy something via a link on this page, we might earn a small commission on it.

Team Rucha Joshi
Team Rucha Joshi
Rucha Joshi, currently managing a team of over 20 content writers at TimesNext is fueled by her passion for creative writing. She is eager to turn information into action. With her hunger for knowledge, she considers herself a forever student and a passionate leader.

Leave A Reply

Please enter your comment!
Please enter your name here

related stories

The operation of platforms such as Robinhood has left several inexperienced traders navigating the complexities of the market without adequate protection.

Robinhood, Democratizing Finance, and Novice Traders

0
The growing wealth gap and income inequality concerns have increased interest in financial service tools and strategies that expand market access to non-conventional participants,...

Health Tech Revolution, Diabetes Apps Market, and Emerging Trends

0
T1D, Type 1 diabetes is on the rise, particularly among young people. According to International Diabetes Federation 2019 data, over 1.1 million adolescents and children...
Today, let's talk about some of the fastest-growing companies in India and explore how businesses and entrepreneurs can capitalize on emerging trends.

Insights from India’s Fastest Growing Companies 2021

0
With a GDP of about 2.9 trillion USD and a population of over 1.3 billion, India is one of the most significant economies worldwide...
Today, let's discuss lucrative business opportunities in digiceuticals, print media, and the expansion of seller marketplaces.

Rising Trends: Wearable Birth Control, Print Media, and 3rd-Party Marketplaces

0
Wearable Birth Control The growing popularity of wearable healthcare products, including birth control, is an emerging transformation towards telehealth. Wearables are wireless communication devices that...
The age of information has somehow left us less informed than ever before. It has built the perfect environment for conspiracy theories.

From Influencers to Big Tech: How Everyone is Monetising From Conspiracies

0
Earth is flat, Tupac is still alive, climate change is a lie, the reptilian elite rules our world, and the COVID-19 is a biological...
Facebook would strive to be maximalist, interconnected experiences set straight out of sci-fi, a world known as the metaverse.

Mark, Metaverse, and Facebook’s Ambitious Mission

0
Mark Zuckerberg, the CEO of Facebook, told his employees about the company's ambitious new initiative last month (1). He stated that the firm is...
ByteDance's new trademark application suggests that TikTok, the short video platform that India banned over a year ago, could find its way back.

Can Tiktok find its way back to India with a changed name?

0
A year after its ban in India, TikTok, the popular short video app, is looking to re-enter its second-biggest market, according to a new...

Netflix Flirting with Gaming Industry: Smart or Dumb?

0
With over 200 million subscribers and intense competition from Disney, Amazon, HBO Max, and the likes, the biggest question of the year was, can...
ADVERTISEMENT