Naspers arm Prosus, Meituan write fresh cheques to food delivery platform Swiggy

Food delivery platform Swiggy’s parent operator Bundl Technologies has raised Rs 804.7 crore ($112.5 million) in a growth round from returning investors Prosus, Meituan-Dianping and Wellington Management. 

The growth round, dubbed Series I, now has Prosus hold over 40% of the company’s preferential shares, a regulatory filing showed on Wednesday. 

Prosus, which invested through an investment vehicle called Myriad International Holdings India Food Holdings, alone accounted for Rs 712.4 crore ($99.6 million) in the round in exchange for 30,170 compulsorily convertible preference shares each having a face value of Rs 10. Prosus is the Euronext-listed entity that holds South African conglomerate Naspers’ international internet assets.

“When we first partnered with Swiggy three years ago, we recognized the Swiggy team had built a sustainable, long-term business, that stood out amongst others in India,” Larry Illg, CEO at Prosus Ventures and Food, formerly called Naspers Ventures and Food, said in a statement on Wednesday.

Chinese food delivery company Meituan and Wellington Management invested through entities Inspired Elite Investments and Hadley Harbour Master Investors respectively. Meituan now owns 6.35% equity of the particular class of shares, while Wellington, a US-based investment firm, holds a 1.09% stake of the same.

The Bengaluru-based startup last raised funds in its over $1 billion worth Series H round led by Naspers in December 2018. 

The fresh infusion comes at a time when the company's bottomline is suffering, given the high cash burn in India’s food delivery sector. Bundl Technologies reported consolidated losses that ballooned to Rs 2,364 crore during the financial year of 2018-2019.

Having grown beyond food delivery, Swiggy aims to use the capital raised in the current round to further develop its new lines of business, addressing visible gaps in the market. The company will continue to invest in new growth areas (Stores, Go and SuprDaily).

“We are laser focused on continuing to execute on our vision while building a sustainable path to profitability,” Swiggy founder and CEO Sriharsha Majety said.

The company claims its transaction numbers grew nearly 2.5x this past year. The restaurant partner base has also grown 4x to over 1.6 lakh partners with over 10,000 new restaurants being added every month. The platform currently has over 250,000 delivery partners across 520 cities - which means 1 in 4 Indians can now access Swiggy.

The two of the last remaining players in the country's online food delivery market, Swiggy and Zomato, have adopted a cost streamlining mode at a time when deep discounting continues to badger profitability plans.

Last month, Swiggy hiked the subscription rates of its user package for Swiggy Super, both for renewal and new registrations.

Rival Zomato Media raised $150 million from existing investor Ant Financial as part of a larger round in the same month. The deal valued the Gurugram-based restaurant aggregator and food delivery platform at $3 billion, pre-money.

The article and headline have been amended from the original version to reflect additional information provided by the company.