India’s foodtech sector is in the midst of an intense war and this is only likely to intensify further, with Swiggy and Zomato leaving no stone unturned in their slugfest. Now the latest buzz is that Swiggy is discussing with its largest investor Naspers to scoop up another fundraising round.
The fundraising round is said to be in the range of $600 Mn, which would make it the largest fundraising round by Swiggy till date. Naspers may also bring Tencent to participate in the fundraising round, sources add. The South African media conglomerate owns 32% stake in the Chinese internet giant.
But what does this ongoing fundraising madness entails for the foodtech sector. As mentioned above, this madness will only intensify the war between Swiggy and Zomato. After going through consolidation phase for almost one and half years, India’s foodtech sector has reached to a level where only fittest player can survive. This is say that only those companies that are capable of raising more funds can really survive in the market.
As such, most small players have already shut shops during the consolidation phase while remaining few will be mostly acquired by big players. FoodPanda’s acquisition of defunct startup Holachef last week once again served us a reminder about what future holds for the small players.
All said and done, the bustling fundraising activity indicates towards the fact that all the incumbent players and investors are betting really big on the Indian economy. There is an incurring hope that the Indian foodtech sector will somehow script the same success story that its Chinese counterpart did during the last 4 to 5 years.
In China, incumbent players like Meituan-Dianping and Ele.me boast mind boggling market valuation and are today considered as dominant global players. In fact, today Meituan-Dianping is the world’s largest online and On-demand delivery platform.