Swiggy in talks with Tencent to raise $700 Mn to support new business

Swiggy
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Online food delivery firm Swiggy last month acquired Mumbai-based on-demand delivery startup Scootsy. Early this month, it acquired a small milk delivery start-up in Mumbai called SuprDaily.  

The two back to back acquisitions further sealed the speculation of Swiggy’s plan of entering hyperlocal delivery space.

Taking the plan ahead, the firm is now planning to raise $700 million to support the new business and is in talks with new investors such as China’s Tencent Holdings. The startup plans to raise the new funds at a valuation of $2.5 billion.

It joined the Unicorn club in last funding round when it raised $210 million led by Naspers and billionaire Yuri Milner’s DST Global at a valuation of $1.3 billion in June. The funding round was preceded by $100 million Series F round from Naspers and Meituan-Dianping in February this year.

The new potential investor Tencent is the backer of Meituan-Dianping.

Besides milk, the Bengaluru-based company also plans to deliver grocery and medicines. It is exploring a service called ‘Dash’.

The service aims to leverage the free time of its 30,000 riders. Between 2 to 6 PM, riders are usually not caught up. Swiggy sees the potential of harnessing its fleet towards Dash.

The company’s CEO and Co-founder Sriharsha Majety had earlier indicated that the online food ordering and delivery startup would be experimenting with a bunch of new offerings over the coming months.

Importantly, Swiggy has been trying to raise the next round for the past few months. Previously, it has had talks with SoftBank, but it couldn’t go further and the Japanese conglomerate seems more interested in investing in Zomato.

Swiggy’s new service is in the lines of its backer Meituan-Dianping which started as food delivery service but over the years it diversified into several verticals, including grocery delivery, dishing out deals on salon, restaurants and other lifestyle categories such as movie ticketing.

The development was first reported by Mint.

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