Swiggy and Zomato In a Tight Race to Raise $1 billion; SoftBank Prefers Swiggy Over Zomato for Investment?
There has been a never-ending race to attain the summit between India’s top two food-tech companies, Swiggy and Zomato. Both of these giants are looking forward to some fresh investments, now that continual customer discounts are costing them a fortune.
They are eagerly looking forward to expand their terms with the Japanese investment major, SoftBank Vision Fund. Speculations have it that the unicorn startup Swiggy will be closing off this deal with SoftBank Group, raising $300-500 million from it.
The War to Raise $1 billion Intensifies Between Zomato and Swiggy
Swiggy has so far managed to raise an amount of $1.5 billion from several investors, including DST Global, South Africa’s Naspers, Accel and Norwest Venture Partners. It is in talks to raise $500-600 mill with Naspers, along with new investment by Google. Zomato, on the other hand, founded in 2008 is spread over 300 cities in India and is in talks to raise about $600-700.
Reports have it that Swiggy could be looking at a valuation of over $4 billion this year, rising from $3 billion last year, with Google and other investors to invest $40-50 million each. Zomato is seeking a valuation of over $3.1 billion from $2.1 billion last year. Goldman Sachs is on the list of one of the investors for Zomato this round.
Both the companies have been holding multiple rounds of discussions with the Japanese investment major, SoftBank Group to invest in them since one year. It has confirmed that it will back one of the two companies, once it is clear as to who is the market leader.
The growth for Zomato and Swiggy are booming in the industry, leaving them very attractive to major investors. This growth has been intensified during IPL and the ongoing Cricket World Cup atmosphere.
Why Does SoftBank Prefer Swiggy over Zomato?
Knowing that both Swiggy and Zomato have been eagerly eyeing SoftBank to invest in them, this might come news to you that Swiggy has managed to almost finalizeindian food tech the deal with SoftBank to invest about $300-500 million in it, giving a tight steal to Zomato.
If the deal strikes successfully, Swiggy will be the 1st Indian food tech business to receive SoftBank’s direct investment.
Swiggy, established in 2014 and ramping up an amount of $1500 million at a catalytic rate, along with an investment validation from Naspers, is what attracted SoftBank to invest in it. In fact, after receiving a $1 billion funding from Naspers in December, Swiggy became India’s most funded food tech industry.
SoftBank has always been keen in consumer space, as it offers scale and scope to grow fast. One of the major highlights in backing Swiggy has been the latter’s incredibly large consumer space. India constitutes almost 16-17% of the world population, thus making it a large market to serve, holding larger opportunities.
Proliferating exceptionally in different corners of the country, Zomato and Swiggy have created bars of excellence in online food delivery platform.