SoftBank invests in India’s food delivery space with Swiggy’s $1.25b round

India-based food delivery company Swiggy has announced the closing of a US$1.25 billion fundraising round.

Co-led by Prosus, the round marks the first investment from SoftBank’s Vision Fund 2 in the Indian food delivery space, according to Swiggy.

Existing investors Accel Partners and Wellington Management returned to participate in Swiggy’s latest fundraise. New backers included Qatar Investment Authority, Falcon Edge Capital, Amansa Capital, Goldman Sachs, Think Investments, and Carmignac.

Photo credit: Swiggy

SoftBank’s much-anticipated entry into India’s food delivery sector comes after years of speculation over the Japanese conglomerate’s potential investment in Swiggy.

The Bengaluru-based firm said it will use the freshly raised capital to accelerate the development of its delivery business and build new food and non-food verticals in the future.

The company will also invest in improving its technology and AI capabilities. With the new funds, Swiggy will also look to strengthen teams across its engineering, product, data science, analytics, and supply chain.

Swiggy pointed out that it has expanded to multiple categories over the past year. For instance, it launched an instant grocery delivery service, Instamart, and widened the coverage of its pickup-and-drop service, Swiggy Genie, to 65 new cities. Swiggy also mentioned that Supr Daily, the daily grocery delivery service it acquired in 2018, was “reaching new users every month.”

“I believe the next 10 to 15 years offer a once-in-a-lifetime opportunity for companies like Swiggy as the Indian middle class expands and our target segment for convenience grows to 500 million users,” Swiggy CEO Sriharsha Majety said in a statement.

Founded in 2014, the startup said it has partnered with more than 150,000 restaurants and stores in 500 cities.

See also: 8 takeaways from Zomato’s investor deck for its $1.3b IPO

Swiggy’s latest fundraise comes after rival Zomato launched its initial public offering last week. Like Swiggy, Zomato is also eyeing expansion into non-food categories like and recently invested more than US$100 million in SoftBank-backed Grofers, one of the largest grocery delivery services in India.