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India’s Swiggy nears $5 billion valuation in new $800 million fundraise
Swiggy has raised about $800 million in a new financing round, the Indian food delivery startup told employees on Monday, as it looks to expand its business in the country quarters after the startup cut its workforce to navigate the pandemic.
In an email to employees, first reported by Times of India journalist Digbijay Mishra, Swiggy co-founder and chief executive Sriharsha Majety said the startup had raised about $800 million from new investors, including Falcon Edge Capital, Goldman Sachs, Think Capital, Amansa Capital and Carmignac, and existing investors Prosus Ventures and Accel.
“This fundraise gives us a lot more firepower than the planned investments for our current business lines. Given our unfettered ambition though, we will continue to seed/experiment new offerings for the future that may be ready for investment later. We will just need to now relentlessly invent and execute over the next few years to build an enduring iconic company out of India,” wrote Majety in the email obtained by TechCrunch.
Majety didn’t disclose the new valuation of Swiggy, but said the new financing round was “heavily subscribed given the very positive investor sentiments towards Swiggy.” According to a person familiar with the matter, the new round valued Swiggy at over $4.8 billion $4.9 billion. The startup has now raised about $2.2 billion to date.
Swiggy had raised $157 million last year at about $3.7 billion valuation. That investment is not part of the new round, a person familiar with the matter told TechCrunch.
He said the long-term goal for the startup, which competes with heavily-backed Zomato and new entrant Amazon, is to serve 500 million users in the next 10-15 years, pointing to Chinese food giant Meituan, which had 500 million transacting users last year and is valued at over $100 billion.
“We’re coming out of a very hard phase during the last year given Covid and have weathered the storm, but everything we do from here on needs to maximise the chances of our succeeding in the long-term,” wrote Majety.
Swiggy last year eliminated some jobs — so did Zomato — and scaled down its cloud kitchen efforts as it attempted to stay afloat during the pandemic, which had prompted New Delhi to enforce a months-long lockdown.
Monday’s reveal comes amid Zomato raising $910 million in recent months as the Gurgaon-headquartered firm prepares for an IPO this year. The last tranche of investment valued Zomato at $5.4 billion. During its fundraise, Zomato said it was raising money partially to fight off “any mischief or price wars from our competition in various areas of our business.”
A third player, Amazon, also entered the food delivery market in India last year, though its operations are still limited to parts of Bangalore.
At stake is India’s food delivery market, which analysts at Bernstein expect to balloon to be worth $12 billion by 2022, they wrote in a report to clients earlier this year. Zomato currently leads the market with about 50% market share, Bernstein analysts wrote.
“We find the food-tech industry in India to be well positioned to sustained [sic] growth with improving unit economics. Take-rates are one of the highest in India at 20-25% and consumer traction is increasing. Market is largely a duopoly between Zomato and Swiggy with 80%+ share,” wrote analysts at Bank of America in a recent report, reviewed by TechCrunch.
“The food delivery business is the strongest it’s ever been, and we’re now well on our way to drive continued growth over the next decade. In addition, some of our new bets like Instamart [grocery delivery business] are showing amazing promise while we’ve also made strides in setting up some of our other adjacencies for liftoff very soon.”
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SoftBank-backed Indian insurance platform Policybazaar raises $75 million
Policybazaar has raised $75 million as the Indian online insurance platform looks to expand its presence in UAE and Middle East.
Sarbvir Singh, chief executive of Policybazaar, told TechCrunch that the startup had raised $75 million, but didn’t elaborate. Falcon Edge Capital led the new tranche of investment in the Indian startup, which has raised about $630 million to date, according to research firm Tracxn.
The 12-year-old startup, which counts SoftBank Group’s Vision Fund and Tiger Global among its investors, is among a handful of startups that is attempting to upend India’s insurance market, which is largely commanded by state and bank-backed insurers.
Policybazaar serves as an aggregator that allows users to compare and buy policies — across categories including life, health, travel, auto and property — from dozens of insurers on its website without having to go through conventional agents.
A screengrab of Policybazaar website
In India only a fraction of the nation’s 1.3 billion people currently have access to insurance and some analysts say that digital firms could prove crucial in bringing these services to the masses. According to rating agency ICRA, insurance products had reached less than 3% of the population as of 2017.
An average Indian makes about $2,100 in a year, according to World Bank. ICRA estimated that of those Indians who had purchased an insurance product, they were spending less than $50 on it in 2017.
In a recent report, analysts at Bernstein estimated that Policybazaar commands 90% of share in the online insurance distribution market. The platform also sells loans, credit cards and mutual funds. The startup says it sells over a million policies a month.
“India has an under-penetrated insurance market. Within the under-penetrated landscape, digital distribution through web-aggregators like Policybazaar forms <1% of the industry. This offers a large headroom for growth,” Bernstein analysts wrote to clients.
The startup, which is working on an initial public offering slated for next year, said it will use the fresh investment to expand its presence across the UAE and Middle East regions.
“PolicyBazaar has shown stellar innovation, execution, and relentlessness in establishing itself as the market leader in online insurance aggregation in India. We believe the playbook it has established over the last 10 years in being the most efficient sales channel for insurance manufacturers, can act as a catalyst to gain market leadership in the GCC,” said Navroz Udwadia, co-founder of Falcon Edge Capital, in a statement.
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India’s Khatabook raises $60 million to help merchants digitize bookkeeping and accept payments online
Khatabook, a startup that is helping small businesses in India record financial transactions digitally and accept payments online with an app, has raised $60 million in a new financing round as it looks to gain more ground in the world’s second most populous nation.
The new financing round, Series B, was led by Facebook co-founder Eduardo Saverin’s B Capital. A range of other new and existing investors, including Sequoia India, Partners of DST Global, Tencent, GGV Capital, RTP Global, Hummingbird Ventures, Falcon Edge Capital, Rocketship.vc and Unilever Ventures, also participated in the round, as did Facebook’s Kevin Weil, Calm’s Alexander Will, CRED’s Kunal Shah and Snapdeal co-founders Kunal Bahl and Rohit Bansal.
The one-and-a-half-year-old startup, which closed its Series A financing round in October last year and has raised $87 million to date, is now valued between $275 million to $300 million, a person familiar with the matter told TechCrunch.
Hundreds of millions of Indians came online in the last decade, but most merchants — think of neighborhood stores — are still offline in the country. They continue to rely on long notebooks to keep a log of their financial transactions. The process is also time-consuming and prone to errors, which could result in substantial losses.
Khatabook, as well as a handful of young and established players in the country, is attempting to change that by using apps to allow merchants to digitize their bookkeeping and also accept payments.
Today more than 8 million merchants from over 700 districts actively use Khatabook, its co-founder and chief executive Ravish Naresh told TechCrunch in an interview.
“We spent most of last year growing our user base,” said Naresh. And that bet has worked for Khatabook, which today competes with Lightspeed -backed OkCredit, Ribbit Capital-backed BharatPe, Walmart’s PhonePe and Paytm, all of which have raised more money than Khatabook.
The Khatabook team poses for a picture (Khatabook)
According to mobile insight firm AppAnnie, Khatabook had more than 910,000 daily active users as of earlier this month, ahead of Paytm’s merchant app, which is used each day by about 520,000 users, OkCredit with 352,000 users, PhonePe with 231,000 users and BharatPe, with some 120,000 users.
All of these firms have seen a decline in their daily active users base in recent months as India enforced a stay-at-home order for all its citizens and shut most stores and public places. But most of the aforementioned firms have only seen about 10-20% decline in their usage, according to AppAnnie.
Because most of Khatabook’s merchants stay in smaller cities and towns that are away from large cities and operate in grocery stores or work in agritech — areas that are exempted from New Delhi’s stay-at-home orders, they have been less impacted by the coronavirus outbreak, said Naresh.
Naresh declined to comment on AppAnnie’s data, but said merchants on the platform were adding $200 million worth of transactions on the Khatabook app each day.
In a statement, Kabir Narang, a general partner at B Capital who also co-heads the firm’s Asia business, said, “we expect the number of digitally sophisticated MSMEs to double over the next three to five years. Small and medium-sized businesses will drive the Indian economy in the era of COVID-19 and they need digital tools to make their businesses efficient and to grow.”
Khatabook will deploy the new capital to expand the size of its technology team as it looks to build more products. One such product could be online lending for these merchants, Naresh said, with some others exploring to solve other challenges these small businesses face.
Amit Jain, former head of Uber in India and now a partner at Sequoia Capital, said more than 50% of these small businesses are yet to get online. According to government data, there are more than 60 million small and micro-sized businesses in India.
India’s payments market could reach $1 trillion by 2023, according to a report by Credit Suisse .
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India’s Bounce raises $72 million to grow its electric scooters business
Bounce, a Bangalore-based startup that offers thousands of electric scooters for rent in India, has raised $72 million to accelerate its bid to impact how people navigate India’s traffic-clogged urban areas.
The Series C funding round for the five-year-old startup was led by B Capital — the VC firm founded by Facebook co-founder Eduardo Saverin — and Falcon Edge Capital. Chiratae Ventures, Maverick Ventures, Omidyar Network India, Qualcomm Ventures and existing investors Sequoia Capital India and Accel Partners India also participated in the round.
This new money means that the startup has raised $92 million to date. The current round valued it at more than $200 million, a person familiar with the matter said.
Bounce, formerly known as Metro Bikes, operates in Bangalore. Its app allows users to pick up a scooter and, when their ride is finished, drop it off at any parking spot. It charges customers based on the time and model of electric scooter they choose. An hour-long ride could cost as little as Rs 15 (21 cents). The startup claims it has already clocked two million rides.
Vivekananda Hallekere, co-founder and CEO of Bounce, told TechCrunch in an interview that the startup plans to use the fresh capital to add more than 50,000 electric scooters to its fleet by the end of the year, up from its current mix of 5,000 electric and gasoline scooters. Additionally, Bounce, which employs about 200 people, plans to enter more cities in India and invest in growing its tech infrastructure and head count.
“We have about 10 metro and non-metro cities in mind. Starting next quarter, we will start to expand in those cities,” he said. The startup also aims to service one million rides in the next year.
Hallekere said Bounce, which currently offers IoT hardware and design for the scooters, is also working on building its own form factor for scooters.
The rise of Bounce comes as it bets that shared two-wheeler vehicles — already a common mode of transportation in the nation — will play an important role in the future of ridesharing, with electric vehicles replacing petrol ones.
This bet has gained more momentum in recent years. Startups such as Yulu, which partnered with Uber earlier this year to conduct a trial in Bangalore; Vogo, which raised money from Uber rival Ola; and Ather Energy have expanded their businesses and gained the backing of major investors.
Their adoption, though still in their nascent stages, is increasingly proving that for millions of people, rides from Uber and Ola are just too expensive for their wallets. Besides, in jam-packed traffic in Bangalore and Delhi and other cities in India, two wheels are more efficient than four.
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India’s Locus raises $22 million to expand its logistics management business
Locus, an Indian startup that uses AI to help businesses map out their logistics, has raised $22 million in Series B funding to expand its operations in international markets.
The financing round for the four-year-old startup was led by Falcon Edge Capital and Tiger Global. Existing investors Exfinity Venture Partners and Blume Ventures also participated in the round. The startup has raised $29 million to date, Nishith Rastogi, co-founder and CEO of Locus, told TechCrunch in an interview.
Locus works with companies that operate in FMCG, logistics and e-commerce spaces. Some of its clients include Tata Group companies, Myntra, BigBasket, Lenskart and Bluedart. It helps these clients automate their logistics workload — tasks such as planning, organizing, transporting and tracking of inventories, and finding the best path to reach a destination — that have traditionally required intensive human labor.
“Say a Lenskart representative is visiting a house or an office to offer an eye checkup, and suddenly two more people there are interested in getting their eyes checked. The representative could attend these two new potential clients, or wrap things up with the first client and take care of his or her next appointment,” said Rastogi.
Locus looks at a client’s past data, identifies patterns and automates these kind of decisions on a large scale. In an example shared earlier with TechCrunch, Rastogi talked about how Locus had built a scanner for e-commerce companies for measuring products.
Rastogi said he will use the fresh capital to develop products and expand Locus in Southeast Asian and North American markets. The startup says half of its 110-person workforce is outside of India. Half of the IP it has built and the revenue it generates comes from its team outside of India.
He said the startup has spent the recent quarters studying these international markets, and has secured some anchor clients to expand the business. Locus is operationally profitable already and any additional capital goes into expanding its business, he added.
The logistics market in India has long been riddled with challenges. A growing number of startups, including BlackBuck — which raised $150 million last week — have emerged in recent years to tackle these problems.
The new funding also illustrates Tiger Global’s new strategy for the Indian market. The VC fund, which has invested in B2C businesses Flipkart and Ola in India, has made a number of investments in B2B startups in recent months. Last month, it invested $90 million in agritech supply chain startup Ninjacart, and weeks later, it gave cloud-based solutions provider Zenoti $50 million. It also participated in customer marketing service ClearTap’s $26 million round.
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