Naspers Ltd. is planning to increase its stake in Indian online food-delivery business Swiggy as the startup plots its third fund-raising round of the year, according to people familiar with the matter. Africa’s largest company by market value has indicated that it intends to support a financing that could raise more than $600 million, Swiggy’s biggest to date, according to the people.
There’s also an opportunity to buy stakes from investors such as Bessemer Venture Partners, they said, asking not to be identified as the information isn’t public. Tencent Holdings Ltd., the Chinese internet giant in which Naspers owns a 31 percent stake, is also planning to invest in the fundraising, according to one of the people.
Naspers declined to comment. Swiggy, Tencent and Bessemer didn’t immediately respond to emails seeking comment. The story was first reported by VC Capital website. Swiggy’s value has risen to more than $2 billion after Cape Town-based Naspers led two previous funding rounds to become the firm’s biggest shareholder, according to the people. Naspers had a 22 percent stake as of the end of March. The company hasn’t made a final decision on whether to take part in the latest financing and may yet opt against it, one of the people said.
Naspers has targeted India for investments as the company seeks to replicate a blockbuster early bet on Tencent. The company made a $1.6 billion profit from the sale of its 11 percent stake in Indian e-commerce startup Flipkart earlier this year, and also has shares in travel business MakeMyTrip and classifieds business OLX.
Food delivery has been a favorite industry of Naspers, with assets including Germany’s Delivery Hero AG and iFood in Brazil. The company plans to invest in another Indian food company called Hungerbox, a tech-enabled corporate catering company, said one of the people. Naspers shares have fallen 22 percent this year, valuing the company at 1.2 trillion rand ($83 billion), as a record slump in Tencent’s share price dragged down its South African investor. Naspers fell 4.6 percent in Johannesburg on Tuesday.
India’s fast-growing food delivery industry
Indian startup Swiggy has raised $210 million in a round led by South Africa’s Naspers Ltd. and investment house DST Global, setting a stage for a battle between well-funded players in the sizzling food-delivery sector. The financing values the four-year-old startup at well over $1 billion, according to people familiar with the deal. That makes Swiggy the second unicorn to emerge from the segment, said the people, who asked not to be identified discussing private details, after New Delhi-based Zomato.
Startups that specialize in delivering all-time favorites from paneer tikka to mutton biryani have snagged at least half a billion dollars in financing this year from some of the world’s largest internet investors and companies. Zomato received $150 million in February from billionaire Jack Ma’s Ant Financial, while Swiggy’s latest round comes on the heels of a $100 million financing in February that was also led by Naspers.
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Its valuation has jumped by over a third in the course of a few months, said one of the people familiar with the deal. New investors this time included DST and Coatue Management, joining existing backers Naspers and Meituan Dianping, the Chinese food-delivery juggernaut. The startup said it would use the funds to improve its supply chain and technology while expanding into new markets. Bangalore-headquartered Swiggy already lists 35,000 restaurants and 40,000 delivery people across 15 cities.
The revival of interest in online food ordering began last year when Uber Technologies Inc. introduced UberEATS across the country. That same year, domestic rival Ola acquired FoodPanda’s local operations and pledged $200 million to the unit. That’s a remarkable turnaround from just a couple of years ago, when investors around the globe wrote off the sector, drying up capital and forcing dozens of startups to shut.