Naspers leads $1bn funding round for India’s Swiggy

Naspers is leading a $1bn funding round in Indian food-delivery service Swiggy, in the South African ecommerce and media investor’s latest big bet on India’s rapidly growing tech sector.

Naspers will invest $660m in Swiggy, which claims to be India’s largest food-delivery platform and allows diners to order from more than 50,000 restaurants in 50 Indian cities. The company relies on a fleet of 120,000 “delivery partner” couriers.

Tencent, which is also backed by Naspers, will also participate in the funding round, alongside existing Swiggy investors DST Global, Coatue Management and Meituan Dianping Swiggy’s Chinese equivalent.

Naspers and Swiggy declined to comment on the company’s valuation after the fresh cash infusion, but people close to the deal said the funding round valued Swiggy at $3.3bn

A previous $210m funding round in June of this year valued the company at $1.3bn.

Sriharsha Majety, Swiggy’s founder and chief executive, said the company would use the new funds to build hundreds more “access kitchens” in neighbourhoods where restaurants are few and far between. Swiggy has about 100 access kitchens but wants to add several hundred more over the next nine months.

“It’s helping restaurants expand into new areas and reach new customers without having to invest in the capital expenditure,” he said. “It’s a plug and play model.”

“We are seeing room for unprecedented scale,” he added. “The food delivery market shows no signs of slowing. These funds will allow us to invest and double down to allow us to grow even faster in the next year.”

The fresh investment into Swiggy comes just days after Naspers led a $540m funding round into the Indian educational technology start-up Byju’s, which offers video tutorials and educational games to Indian schoolchildren.

Naspers said the two investments reflected its “commitment to India across multiple sectors”, as more Indians get online with the help of low-cost smartphones and cheap data. “Indian online consumers will be a significant driver of online growth in the world,” it said.

Johannesburg-listed Naspers is best known for its lucrative early bet on China’s Tencent, a smart call that has made it Africa’s most valuable company. In March of this year, Naspers sold $10bn of its Tencent shares. While it still holds about a third of the Chinese company’s stock, the South African group has started to diversify into other markets, including India.

In 2012, Naspers invested in Flipkart, the Indian e-commerce platform, and it sold its stake to Walmart last year for $2.2bn, representing a 32 per cent internal rate of return on its cumulative $660m investment.

Naspers also holds stakes in the Indian payments platform PayU, and OLX, an online classifieds business.

Swiggy, and India’s burgeoning food delivery market, offers a tempting target. The food delivery sector in India has grown rapidly in recent years as Indian incomes rise and urban traffic boosts incentives for ordering food in rather than dining out.

Naspers initially invested in Swiggy in April of last year, and since then the company’s daily order volume has increased tenfold.