Online grocery ordering is here to stay, so says food delivery app Swiggy. The India-based startup company’s hyperlocal grocery service Instamart will receive a sizable boost in funding after Swiggy’s most successful round to date drew in $1.25 billion, according to The Economic Times.
Qatar Investment Authority, Falcon Edge Capital, Amansa Capital, Goldman Sachs, Prosus and Accel contributed a combined $800 million, while SoftBank Vision Fund II invested $450 million. As reported previously, SoftBank waited to invest in Swiggy until receiving approval from the Indian anti-monopoly watchdog, the Competition Commission of India (CCI). SoftBank had been vying for entry into the food delivery sector since 2017. The company has been in talks with Swiggy, as well as its competitor, Zomato.
Following the latest round of funding, Swiggy is said to be worth $5.5 billion.
Swiggy Co-founder and Chief Executive Sriharsha Majety told The Economic Times that while the company’s food delivery business saw a dramatic drop in volumes during the beginning of the COVID-19 pandemic in 2020, it later rebounded. The food delivery portion of the business is now 30 percent larger as compared to pre-pandemic levels, according to the article.
Swiggy’s most recent investments will also fund the hiring of tech talent and evaluating M&A opportunities.
In addition to Swiggy, other digital platforms are banking on the growing popularity of ordering food online. A PYMNTS survey of 2,300 adults in May found that 17 percent of all consumers use online apps such as Instacart to order and purchase groceries, while 14 percent order groceries online once a month using digital platforms, as well as grocery stores that offer their own online ordering choices. Most notably, out of the consumers who said they are shopping for food more in a digital format, approximately 72 percent said they will continue to stick with digital ordering and purchasing moving forward.