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Daily news and analysis about the food tech revolution

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Delivery Service Swiggy Raises $1.25B

Indian delivery service Swiggy has closed a $1.25 billion round of Series J funding led by Softbank Vision Fund 2 and Prosus Ventures, according to TechCrunch. Qatar Investment Authority, Falcon Edge Capital, Amansa Capital, Goldman Sachs, Think Investments and Carmignac participated in the fundraising, as well as existing investors Accel Partners and Wellington Management.

The “heavily oversubscribed” round includes the $800 million the company raised earlier this year. To date, Swiggy has raised $2.9 billion in funding and has a post-money valuation of $5.5 billion.

Like its rival Zomato (who filed to go public in April 2021), Swiggy is best known across India for its restaurant food delivery service. However, Swiggy’s Chief Executive Sriharsha Majety said that this new funding will also help accelerate its non-food categories in addition to traditional restaurant delivery. “I believe the next 10-15 years offer a once-in-a-lifetime opportunity for companies like Swiggy as the Indian middle class expands and our target segment for convenience grows to 500 million users,” he told TC.

In 2020, Swiggy expanded its service to include delivery of grocery, household items, and laundry, among other categories. 

Zomato, too, has branched out beyond restaurant delivery with its Zomato Marketplace that connects restaurant owners with suppliers of non-food items. The company raised $1.3 billion in its IPO recently. 

The move to offer more than just restaurant meals is similar to developments in other parts of the world. A chief example is DoorDash, the U.S.-based company that added grocery services in 2020 and has also since expanded its “dark convenience store” service. Uber has also started offering non-restaurant food delivery.

In addition to the major companies, an entirely new pack of speedy delivery services has emerged and promises basic food and household items in a fraction of the time it takes a restaurant meal to get cooked and delivered.

Speedy delivery has yet to reach India in any major capacity. When it does, it will add yet-more competition to the already uber-competitive Indian delivery market.

Indian Food Delivery Startup Swiggy Raises $800 Million

India-based food delivery startup, Swiggy, has raised an addition $800 million in funding, The Economic Times reported today. The round was led by Falcon Edge, Amansa Capital, Think Investments, Carmignac and Goldman Sachs, with participation from new investment from sovereign wealth funds Qatar Investment Authority and GIC of Singapore. This brings the total amount of funding raised by Swiggy to roughly $2.4 billion.

India went on a severe national lockdown during the pandemic last year and Swiggy reportedly saw its daily business drop to processing fewer than one million orders a day, down from three million prior to the pandemic. The strict measures forced Swiggy to cut more than 2,000 jobs and scale back on its ghost kitchen ambitions.

But the Economic Times writes that food delivery was designated an essential service by the Indian government and that since then, both Swiggy, and its rival, Zomato have rebounded. Each company recorded their highest levels of business on December 31.

In an internal email sent out to the company (and viewed by The Economic Times) announcing the new funding, Swiggy Co-Founder and CEO, Sriharsha Majety wrote:

The 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 investments later.

With its new funding, Swiggy is now valued at $5 billion. The fundraise and new valuation come as Zomato, which is valued at $5.5 billion is prepping to go public later this year.

Report: Indian Delivery Service Zomato Raises an Additional $52M

India-based food delivery service Zomato has raised $52 million in funding from Kora Investments. The Mint was first to report the news, citing a person close to the matter who asked not to be named. The $52 million is, according to that person, part of Zomato’s ongoing Series J funding round that could eventually be as high as $600 million. The new fundraise brings Zomato’s current total funding to $1.2 billion.

Even amidst difficulties brought on by the pandemic, it’s been a very busy year for Zomato, and one filled with more ups than downs. The company bought Uber Eats’ India business in March for $206 million, then raised $5 million in funding in April as part of its ongoing Series J. Like chief rival Swiggy, Zomato also unveiled a grocery delivery service as a way of diversifying its business model.

While Zomato did have to make cuts to its workforce in May, that hasn’t seemingly hampered the company’s overall growth. As of September, Zomato said it had recovered about 80 percent of its pre-pandemic sales. To top all that off, the company plans to go public in the first half of 2021.

Prosus-backed Swiggy is currently Zomato’s main competitor in India, and has raised $1.6 billion to date. However, Amazon’s recent entry into the India food delivery market could mean formidable competition for both Swiggy and Zomato, especially since Amazon already has a presence in India through its PrimeNow and AmazonFresh services.

Last month alone, Zomato closed a $62 million funding from Temasek unit MacRitchie Investments and a $103 million from Tiger Global. The Mint’s source said Kora is expected to make a follow-up investment “of a larger amount,” though no exact figure was given. 

Zomato: India’s Food Delivery Nearing Pre-COVID Levels

The food delivery market in India has almost bounced back to pre-COVID levels. A recent blog post by Zomato stated that gross merchandise levels are roughly 85 percent of what they were pre-pandemic, up from 75 percent in August.

According to Zomato, major cities like Delhi and Mumbai are nearing full recovery, while others “have recovered completely and have exceeded pre-COVID levels.” Affluent parts of cities are driving the recovery, which makes sense given the cost of using third-party delivery services. Zomato said more high-end restaurants have also gone online, which accounts for some of the growth as well. “Overall spends on such premium restaurants have grown by over 25% over pre-COVID levels,” the company said.

Other influential factors include more at-home delivery orders for celebrations and more group orders, since everyone’s stuck at home with their families.

Of course, the caveat here is that Zomato has quite a bit of skin in this game, it being one of India’s leading food delivery services. So while the stats from this recent blog post only include Zomato’s customer base, they’re likely a fairly accurate gauge of the entire India food delivery market. (Swiggy is the only other major delivery player in India right now.)

Zomato this year also expanded its services to include groceries and household goods (a move that other third-party delivery services like DoorDash have done in other parts of the world.) The company also raised $162 million earlier this month and said it is preparing for an IPO in 2021.

Right now, Zomato’s main competitor for all this growth is Proses-backed Swiggy, which has raised $1.6 billion in funding to-date. Everything could change, though, depending on how successful Amazon is at scaling its newly launched food delivery business across the country. Neither Zomato nor Swiggy is profitable yet. Amazon, meanwhile, already has a presence in India through its Amazon Fresh and Amazon PrimeNow platforms. 

Food Delivery Service Zomato Raises $62M From Temasek

Indian food delivery startup Zomato has raised a $62 million financing round from Singapore’s state investment arm Temasek Holdings. According to the Economic Times, the transaction was made from Temasek unit MacRitchie Investments, which is an existing investor in the food delivery service. The round values Zomato at about $3 billion.

It also comes after several months of ups and downs for the food delivery service. In March, it bought Uber Eats’ India business for $206 million, and raised a $5 million Series J round in April. Also in April, Zomato unveiled its grocery delivery service as a way of diversifying its business model. 

However, the company also had to cut 13 percent of its workforce in May in response to the ongoing pandemic and the many restaurants across India that have had to shut down permanently because of it. (Chief rival Swiggy also made cuts to staff in response to COVID-19.)

Things appear to be looking up for the Indian food delivery market, though. Online food delivery has recovered about 80 percent of its pre-pandemic sales, according to Economic Times. A blog post from Zomato itself notes that “the number of restaurants offering food delivery are at 70% of pre-COVID levels.” The company also says that “recovery trends are strong.”

Also in India this week, Dunzo, a startup that delivers everything from restaurant meals to groceries to household supplies, announced it had raised $28 million.

This latest investment for Zomato comes as the company is struggling to receive two-thirds of its $150 million investment from China’s Ant Financial due to regulatory changes with investors in China.

Food E-Commerce Startup Dunzo Raises $28M

Bengaluru, India-based food delivery startup Dunzo has raised $28 million in what is the first tranche of the company’s Series E round. Entracker was first to report the news, noting that this round was led by Google and LGT Lightstone Aspada with participation from Lightbox, Bhoruka Finance Corporation, 3L Capital, Moving Capital, and Pivot Ventures.

The round follows Dunzo’s $45 million fundraise in October 2019 and brings the company’s total funding to $116.4 million.

Dunzo, which started as a WhatsApp group in 2014 to connect locals to grocery stores and restaurants, has over the years grown into a sizable e-commerce platform that delivers groceries, restaurant meals, and other supplies to customers around India’s major cities. According to Entracker, the company has about 75,000 stores on its platform.

It’s a lucrative, albeit highly competitive, time to be a food delivery startup, with the pandemic keeping more people at home and subsequently raising demand for online groceries and meal orders. Dunzo itself said in April it had seen a 3x increase in growth for food and beverage orders.

Though it’s hardly the only service in India that’s kept busy ferrying all manner of food goods to customers on lockdown. Both Swiggy and Zomato, the country’s major restaurant delivery services, have recently added grocery services. Both have also announced layoffs, too, underscoring the impact COVID-19 has had on business. The Indian food delivery market has also seen some consolidation: In March of this year, Zomato bought Uber Eats’ India business for  $206 million.

Like Swiggy and Zomato, Dunzo has been diversifying its business of late. Entracker reports that the company has recently invested in B2B services to “enable logistics for hyperlocal retailers.” It also currently runs 10 “dark stores” that help local retailers fulfill more orders.

More COVID-Related Cuts for Food Delivery: Grab Lays Off 5 Percent of Its Workforce

Singapore-based food delivery service Grab is letting go of about 5 percent of its workforce and “winding down” several projects and functions, according to AgFunder News. 

The layoffs are part of Grab’s ongoing struggles with COVID-19’s impact on the global economy. Grab had previously asked its workers to accept decreased hours or take unpaid leave of absence in an effort to avoid having to reduce its workforce. The company also implemented pay cuts for senior management.

But in a letter to staff that was cited by AFN, Grab cofounder and CEL Anthony Tan noted that after trying everything possible to avoid staff reductions, the company now has to accept this reality. “In spite of all this, we recognize that we still have to become leaner as an organization in order to tackle the challenges of the post-pandemic economy,” he said.

Affected employees will receive “enhanced severance payments, expedited equity vesting, extended medical insurance coverage, and access to career advice and mental health support.”

Softbank-backed Grab bills itself as “your everyday everything app.” The company offers on-demand food delivery as well as ride hailing services in about 300 cities across Southeast Asia. 

And it’s hardly the first food delivery service to announce layoffs in the last few months. In India, the two major players in third-party delivery, Swiggy and Zomato, both announced layoffs in May. U.K.-based Deliveroo cut 15 percent of its workforce in April, citing coronavirus’s impact as the reason, and Uber recently laid off employees, including those working for the company’s Eats division.

At the same time, consolidation has come for the food delivery world, most notably in Just Eat Takeaway’s plans to acquire Grubhub. In 2019, Delivery Hero bought South Korean Woowa Bros.’ food delivery service, and Brazil-based iFood merged with Colombian service Domicillios.com.

Layoffs don’t necessarily signal that a company is about to get gobbled up by an acquisition, but the pandemic has certainly caused many on-demand businesses around the world to struggle, cut costs, and become leaner all around. Competition has long been fierce in food delivery, especially in Southeast Asia, where Grab competes with rival Gojek for dominance. Grab’s announced layoffs this week are hardly the last we’ll see in the coming months as the market for on-demand food delivery becomes even more cutthroat.

Amazon Launches a Restaurant Food Delivery Service in India

Amazon today announced the launch of its own restaurant food delivery service in India, according to TechCrunch. Dubbed Amazon Food, the service launched in select postal index codes of Bangalore before expanding to other cities in the future.

“Customers have been telling us for some time that they would like to order prepared meals on Amazon in addition to shopping for all other essentials,” an Amazon spokesperson said. The company will launch with a handful of restaurant and ghost kitchen partners from which customers can order meals.

Amazon’s starting a food delivery service in India was actually meant to happen in 2019 but got pushed to March of this year, just as the COVID-19 pandemic started to take the entire world in its grip. India’s nationwide stay-at-home order further delayed the Amazon Food service’s debut until now.

Amazon Food arrives in India at a time of upheaval for food delivery in that country. Uber Eats recently exited the Indian market, selling its business in that country to local delivery service Zomato for $206 million. But Zomato, along with its chief rival Swiggy, are currently struggling under the negative impact the pandemic has had on India. Both companies have cut jobs, and Swiggy is also scaling back its ghost kitchen division as a way to cut more costs and keep its operations “nimble.”

Amazon’s entry into the market could exasperate the challenges these local players already face. Even without a pandemic keeping India’s 1.3 billion people on lockdown, neither Swiggy nor Zomato is profitable yet — a common theme for third-party food delivery companies worldwide.

Amazon, meanwhile, has invested heavily into the Indian market and already operates Amazon Fresh and Amazon PrimeNow platforms in that country.  

India-based Food Delivery Service Swiggy to Cut 1,100 Jobs

Layoffs in the food delivery sector continue. Today, India-based service Swiggy said it will cut 1,100 jobs as coronavirus continues to negatively impact the on-demand food delivery sector (h/t TechCrunch). In an email to staff that was also posted to the company’s blog, Swiggy cofounder and CEO Sriharsha Majety confirmed that the the company is cutting jobs “across grades and functions in the cities and head office over the next few days”

The cuts are in response to the ongoing impact the COVID-19 pandemic has had on India’s food deliver sector as people are more wary of ordering food in for both health and financial concerns. Sources familiar with the matter told TechCrunch that Swiggy is processing less than 1 million orders per day now, compared to the almost 3 million it did before the pandemic. 

According to Majety’s email, all employees impacted by the cuts will receive at least three months of salary. They get an additional month for each year they have spent with Swiggy. The company will also provide medical and accident coverage through the end of the year.

This isn’t the the first time Swiggy has announced job cuts in recent months. At the end of April, Indian news outlet Entracker reported that the service was cutting staff and also scaling back its cloud kitchen division. TechCrunch’s sources indicate that while it’s unclear if these new layoffs are related to April’s announcement, they will happen mostly outside of Swiggy’s cloud kitchen operations.

The layoff announcement comes a little more than a month after Swiggy announced it had raised a $43 million as part of an ongoing Series I round of funding (the company has raised $1.42 billion in total).

Swiggy isn’t the only food delivery company laying off staffers in response to the COVID-19 pandemic. Just last week it was reported that Swiggy rival in India, Zomato, cut 13 percent of its workforce and was asking remaining employees to take a pay cut. Over in the UK, Deliveroo cut 15 percent of its staff at the end of April. And while Eats has been a bright spot for Uber, it too is scaling back and ceasing operations in eight different countries.

It’s unlikely that Swiggy’s will be the last layoff announcement to come from food delivery companies. The entire sector is going through tumult as restaurants close down altogether, local governments impose delivery fee caps, and shady business practices continue to come to light.

Yet at the same time, food delivery has never been more important. Even though some states are re-opening after shelter in place orders, experts are warning about a potential second wave of infections. Hopefully delivery business have learned these hard lessons and will be better prepared should we need them in another emergency.

Indian Delivery Service Swiggy Will Cut Jobs and Scale Back Its Ghost Kitchen Division

Swiggy, one of India’s largest food delivery services, says it plans to cut about 1,000 jobs as the COVID-19 pandemic continues to wreck havoc on the global economy, according to Indian news outlet Entrackr. The layoffs are set to happen next month and will mostly impact the company’s ghost kitchen division.

The announcement comes just weeks after Swiggy announced a $43 million fundraise as part of an ongoing Series I round. The company is currently valued at $1.42 billion.

But unicorn status is no match for a pandemic, which has put India’s population of 1.3 billion on lockdown and gravely impacted businesses. Swiggy as well as its chief rival Zomato have both seen a drop in the number of daily orders they fulfill. Some cities in India — namely Telangana — have outright banned food delivery for the time in order to prevent further spread of the coronavirus. Entracker also noted that the Indian government is advising ghost kitchens to operate with half their workforce.

A Swiggy spokesperson said measures to deal with all these factors include renegotiating contracts with landlords, relocating some kitchens, and shutting down others. “As the lockdown gets further extended, we are evaluating various means to stay nimble and focused on growth and profitability across our kitchens.” 

Delivery services, restaurant tech companies, and restaurants themselves are all feeling the economic strain imposed by country-wide lockdowns, and layoffs are becoming more commonplace each week. In the last week alone, Yelp laid off 1,000 staff and furloughed others, Sweetgreen cut 10 percent of its HQ staff, and restaurants left and right have laid off or furloughed employees as dining rooms remain closed all over the world.

You would think ghost kitchens, which cater specifically to off-premises orders, would be a booming business right now. But Swiggy’s layoffs also underscore an important point: that ghost kitchens are superfluous to operations unless you have the customer demand to justify them. At last check, Swiggy had ghost kitchens in 14 cities across India.

The company is currently in the process of shutting down around half its ghost kitchens. Meanwhile, the company expects more layoffs — possibly up to 40 percent of staff — in this division to follow in the future.

Rebel Foods Raises $50M for Its India-based Cloud Kitchen Network

India-based ghost kitchen operator Rebel Foods announced this week it has raised $50 million in fresh funding from NY-based hedge fund Coatue Management. The new investment is part of an ongoing Series E round, according to AgFunder News.

As cloud kitchen networks go, Rebel Foods is Old Guard compared to newer entrants like Kitchen United and Travis Kalanick’s CloudKitchens. Rebel was founded in 2010 and launched as quick-service chain kebab chain Faasos in 2011, and as of last check was targeting a $1 billion valuation.

Rebel currently operates over 300 cloud kitchens across 35 Indian Cities and says it processes over 2 million orders per month. Faasos still operates as a restaurant brand within those kitchens, alongside other Rebel-owned virtual restaurants. Customers can order and pay for food through Rebel’s own app, and all meals are prepared in Rebel kitchens and delivered straight to customers. 

In the Indian food delivery market, Rebel competes with both Swiggy and Zomato, the latter of which also operates its own ghost kitchens. Until recently, Uber Eats was also a competitor, and its exit from the Indian market has left the landscape even more consolidated and competitive.

India’s entire population of 1.3 billion people is currently on lockdown in an effort to stem the spread of COVID-19, and demand for food delivery has skyrocketed in response. Rebel’s network of virtual restaurants is well suited to meet that demand. Since Rebel doesn’t operate any brick-and-mortar with actual sit-down space, the company isn’t taking a hit from forced business closures happening across the country, either.

In August, the company raised $125 million in funding from Coatue Management, Goldman Sachs, Indonesian delivery service Gojek and other investors. With Gojek, it plans to open cloud kitchens in Indonesia over the next 18 months. The company is also expanding to the United Arab Emirates.

Swiggy, Zomato Expand Delivery Services to Groceries and Beyond in India

Swiggy, one of India’s biggest food delivery services, announced this week it has raised $43 million as part of its ongoing Series I round. The round was led by existing investor Tencent, and new investors Ark Impact, Korea Investment Partners, Samsung Ventures and Mirae Asset Capital Markets. it brings Swiggy’s total funding to date to $1.42 billion and values the company at $3.6 billion, according to TechCrunch.

The round is also part of Swiggy’s ongoing efforts to expand its business from restaurant food delivery to include other items, including grocery, laundry, and other household items. The company says it will use the new funds to address market gaps in those areas.

Pre-pandemic, Swiggy was already headed in this direction. Two services, Swiggy Stores and Swiggy Go, launched in 2019 to deliver grocery, medicine, house keys, and many other items to customers within a one-hour timeframe.

With cases of COVID-19 on the rise worldwide, the company isn’t alone in branching out from restaurant meals — more services that traditionally peddled only restaurant food are widening the range of products they can deliver. DoorDash recently expanded its food delivery capabilities to include convenience-store items from 7-11, Wawa, and other such places. Postmates has a delivery partnership with Walgreens through which customers can get wellness products, medicines, and general household items. 

Those examples are in the U.S., though. In India, expanding into new delivery categories could give Swiggy a competitive edge at a time when the entire country is on lockdown and most business is disrupted. However, Swiggy’s biggest competitor, Zomato, has also gotten hip to the potential profitability of delivering more than just restaurant meals. The service just announced Zomato Market, which identifies nearby grocery stores delivering goods and delivers items.

Zomato also bought Uber Eats’ business in India earlier this year, creating a two-man race in the India food delivery market. With 1.3 billion people in the country on lockdown right now, there are plenty of customers to go around. Post-pandemic, whenever that is, the market may become more of a race to see which service can better prove profitability.