Global technology hedge fund Coatue Management along with some other firms are in talks to invest $50-100 million in online food delivery platform Swiggy, according to reports by media.
There have also been talks of SoftBank and Tencent taking interest in investing in Swiggy.
Background
The South African media giant Naspers and Chinese e-commerce firm Meituan-Dianping had invested $100 million in the Bengaluru-based startup two months ago where Meituan-Dianping invested $40 million.
Swiggy was valued at $700 million last month.
How important is the funding?
The deal is not final and it is not clear if the investment will be an extension of the previous round or a new one,
However, this funding would help Swiggy fill up its coffers to help it in the competition with Ant Financial-backed Zomato as well as new entrants like Ola and UberEATS.
About Coatue
A technology-focused hedge fund, New York-based Coatue is led by former Tiger Management executive Philippe Laffont and has over $15 billion in assets under management. Its interest in the Indian Internet ecosystem after there has been penetration of affordable data in India. Laffont believed that this will help deepen customer acquisition through deeper penetration, as per a report in Forbes last month.
Swiggy’s tryst last year
In July last year, an anonymous blog post was published on Tumblr. The blog post was titled, “Swiggy Sales” and was written by four Swiggy employees. Out of those four, two are on the verge of quitting and one is fired by the company have made many serious claims about the food delivery startup.
It has put the praising growth numbers of the company into question. The anonymous employees have also shared the internal data and slides. The post releases serious allegations about the founders building the business just to, eventually sell it off to earn quick money.
According to the four employee’s blog post, the company has allegedly raised its commission from 5% to 25% within the time period of just 3 years. And in the future, the management has plans to hike this up to 30%.
The employees claimed in the blog post that,
“We are made to lie about our market share, as well as our order volumes to restaurant owners. The worst part is that instead of helping these restaurants grow their business, we are trained to arm-twist them to increase our commissions every couple of months.”
The company has declined most of the allegations stating that “the recent blog post from an anonymous source is targeted at maligning the reputation of Swiggy as an organization.”
Also Read: SoftBank-Backed Grab Acquires Uber In Southeast Asia, Is India Next On The List?
