Swiggy was founded in 2014 by Sriharsha Majety, Nandan Reddy and Rahul Jaimini. The company arranges food from favourite restaurants, get it delivered it fast. Initially Swiggy covered certain areas of the Silicon Valley of India, Bengaluru like Koramangala, Indiranagar, BTM, HSR Layout and Whitefield. They have added several areas like JP Nagar, Jayanagar, Basavanagudi and other areas.
Food delivery market in India is estimated to be $6 billion and poised for growth at faster pace. Swiggy has started operations in Hyderabad and Gurgaon. The company has tied up with 100+ restaurants for food delivery. On the other hand they have tied up with Bengaluru based ‘cloud kitchens’ Eatongo and Brekkie.
Swiggy is in the process adding some more such cloud kitchens to their fold and in process of negotiating with few more. Cloud Kitchens are online breakfast and brunch units that do not have a restaurant. Most of them offer food through their website/apps, apart from food delivery.
The company promoters Sriharsha Majety, Nandan Reddy have graduated from BITS Pilani and Rahul Jaimini is an alumni of IIT Kharagpur. Swiggy raised Series ‘A’ funding in the month of April for $2 million from SAIF Partners and Accel Partners. On June 9, 2015 the company raised Series ‘B’ funding of $16.5 million from Norwest Venture Partners along with existing investors.
With the funding Swiggy wants to consolidate their position in the food delivery market. Sriharsha Majety, co founder of Swiggy said “We have seen a 10x growth in order numbers over the past few months and this investment will help us to expand exponentially as we intend to establish ourselves in several new cities by the end of the year. Combining technology with our own delivery fleet allows us to provide users a superior experience, which has been our key strength, and we will continue to build on it.”
Sumer Juneja, Principal at Norwest Venture Partners said “Swiggy’s delivery infrastructure solves a major need in the market by enabling restaurants to concentrate on their core business and scale up their delivery revenues. Simultaneously, the product’s ease of use and the convenience it provides to consumers has resulted in strong repeat rates and an increased customer base.”
Online food ordering and delivery space is attracting many PE investors. Many startups are drawing interests of investors in terms of funding and the segment is witnessing consolidation too. Market leader Foodpanda.com which owns Foodpanda brand, a multi location online food ordering company has raised $100 million funding from leading investment banker Goldman Sachs this month. Foodpanda acquired Just East India and TastyKhana.
The market seems to be little crowded with the companies like Mumbai based TinyOwl, delyver.com, Foodpanda vying for space. Zomato has also started food ordering business may get into delivery of food too in near future. Ola Cabs with their OlaCafe have rolled out operations in certain localities of major metros like Bengaluru, Mumbai, Hyderabad, Chennai and Pune to name a few.
The segment is attracting investment from promoters of other startup companies like Bengaluru based Dazo earlier known as TapCibo secured funding from the promoters of Commonfloor.com and TaxiForSure.
Earlier restaurants depended on their delivery team for food delivery for the orders received on phones. Now the landscape is slowly getting changed with the venture of online food delivery startups.