Swiggy bags funding to become Uber for food delivery in India

Food ordering and delivery app Swiggy has bagged US$16.5 million in series B funding from Norwest Venture Partners (NVP) and existing investors SAIF Partners and Accel Partners. The company secured US$2 million earlier this year.

Swiggy accepts orders from users and has a delivery staff of 150 who pick-up the food from restaurants and deliver to customers. The app is powered by routing algorithms to create an efficient delivery system.

The nine-month-old startup has presence in Bangalore, Gurgaon, and Hyderabad and is gearing up for expansion. The fresh funding will also be used for marketing. It has partnered with over 100 restaurants in each city.

Swiggy is betting on their system of timely deliveries and service levels to capture the online food delivery market in India. It doesn’t have a minimum order policy on any restaurant.

The company was founded by Sriharsha Majety and Nandan Reddy, a BITS Pilani alumnus, and Rahul Jaimini, an Indian Institute of Technology (IIT) Kharagpur grad.

Food startups have been hot in India this year. Rocket Internet-backed Foodpanda recently acquired local rivals TastyKhana and Just Eat to expand faster. Food discovery service Zomato, which is on a global expansion spree, has now turned its attention to diversifying into food delivery as well.

Another heavily funded startup in the space is location-based food ordering service TinyOwl, which raised US$20 million in several rounds from Matrix Partners, Sequoia Capital, Nexus Venture Partners, and a few angel investors. However, none of these companies take the onus of delivery.

“The total food delivery market in India is estimated to be US$6 billion and continues to expand at a rapid clip. 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,” says Sumer Juneja, principal of NVP India.

More niche food startups like iTiffin, Yumist, and TapCibo are also booming. Unlike Swiggy, these three startups deliver food cooked by their own chefs instead of relying on restaurants. Most of them position themselves in the health food space.