Bengaluru based food delivery startup Swiggy is aiming for $250 Mn funding round from some high profile investors, according to close sources familiar with the matter. While this will surely fatten Swiggy’s cash reserves, it will also propel the startup into the coveted unicorn club. This would make the Bengaluru headquartered company the second food tech startup to join the prestigious club, since its close rival Zomato achieved the unicorn badge earlier this year.
Sources have named SoftBank, Naspers, Tencent and Alibaba among the frontrunners for the funding round. One source specially claimed that Swiggy’s final selection of investors will mostly hinge on the ‘amount of funding’ and ‘valuation at which the funding will happen.’
However, experts argue that since Swiggy’s last funding round led by Naspers happened slightly lower than $1 billion valuation mark, it should achieve the unicorn status very easily irrespective of which investors it decides to go with.
Swiggy has so far declined to comment on the news report. The company has also failed to respond to E-mail queries sent by some of leading business websites.
Swiggy’s hunger for funds is quite understandable
While most startups are desperate for funds, Swiggy’s hunger for funds is also due to the fact that the entire food tech sector is most likely to go through high-intensity competition in coming months. Ola has already announced that it will soon invest millions in Foodpanda, which it acquired last year. Ola’s counterpart Uber, on other hand, has already launched its food delivery app UberEat in selected cities.
But experts claim that Swiggy’s insatiable thirst for funds springs from its necessity to keep competitive pressure on its close rival Zomato. This is more so because Zomato earlier this year raised $200 Mn from Ant Financials and has successfully improved its balance sheet during the last few quarters.