Indian food delivery companies, Zomato and Swiggy, have gained funding as much as $43 million (Rs 327.8 crore). These latest fundings have valued Zomato at about $3.25 billion and Swiggy at about $3.4 billion.
Zomato has raised $5 million from Pacific Horizon Investment Trust whereas Swiggy raised $43 million in its ongoing series-1 round.
The total investment in the series-1 round is valued at around $156 million. Several new investors like Ark Impact, Korea Investment Partners, Samsung Ventures and Mirae Asset Capital Markets participated in this round.
Just a few weeks ago, Swiggy received funding of $112 millions from South African investor “conglomerate Naspers.” Whereas, Zomato in January raised $150 million from existing investor – Ant Financial, which is a part of Alibaba. Last year Zomato raised whopping $62 million from Berlin-based Delivery Hero and China’s Shunwei Capital.
Swiggy CFO Rahul Bothra stated, “Our focus remains to execute on our vision while building a sustainable path to profitability.” According to business valuations, Swiggy receives 900,000 to one million daily food orders and generate $40 million every month.
Zomato reported net sales of Rs 332.27 crore, Rs 466.36 crore, and Rs 1,312.58 crore for the Financial years 2017, 2018 and 2019 respectively. Whereas, Swiggy reported net sales of Rs 133 crore, Rs 417 crore and Rs 1121.7 crore for the financial years 2017, 2018 and 2019 respectively.
Food Delivery Segment Face Huge Losses
However, both these food delivery companies have faced a significant jolt because of the coronavirus lockdown. These platforms dominated the food delivery segment in India; yet, the online orders have come down by 70 per cent. People have reduced online food ordering due to the lockdown. Due to coronavirus, there is a massive decline in online orders and business of these companies has severely crumbled.
To bear the loss, Zomato initiated delivery of essentials and groceries online under its new segment ‘Zomato Market’. This segment is launched to help people seeking delivery of essential items at their doorsteps.