The SoftBank Vision Fund is preparing to invest $450 million in Indian food delivery startup Swiggy, Indian publication The Economic Times reported, after a few years of sitting on the sidelines as the sector grew. Bengaluru-based Swiggy would likely be valued at $5 billion.
Earlier this month, Swiggy snagged $800 million in a funding round led by Falcon Edge Capital and Goldman Sachs, with participation from Accel and Naspers. In a note to Swiggy employees, Sriharsha Majety, founder and CEO, said the funding would be used to help Swiggy expand in various ways.
The Economic Times reported that SoftBank’s interest comes at a time when rival Zomato has raised over $1 billion in the past year and is looking at launching an initial public offering (IPO) of stock. Also, DoorDash held a successful IPO in December.
SoftBank Founder Masayoshi Son decided to back Swiggy as the company “is looking to expand into more than food delivery,” The Economic Times reported, citing an unnamed source. For example, Swiggy has been pushing its quick-delivery service Instamart and essentials delivery service Supr Daily.
Working in the favor of India’s food delivery business is the pandemic, which has fueled demand.
Also spurring the growth of food delivery in India is that more and more consumers in India are connecting to the internet and using it for buying goods. The growing use of cellphones is also a driver of eCommerce.
Battling the pandemic has not meant a smooth ride for Swiggy. The company had to lay off workers in May as businesses closed and COVID-19 infections started spreading.