Swiggy plans to use these funds to venture into new business areas, especially the hyperlocal delivery space.
Swiggy, one of the largest food delivery platforms in India, is set to raise $700 million from Tencent Holdings and other new investors, according to a report by Mint.
The platform plans to use these funds to venture into new business areas, especially the hyperlocal delivery space, the report suggests.
Earlier this year, Swiggy had raised funds at a valuation of $1.3 billion. This deal may double its valuation to at least $2.5 billion, the report adds.
It was earlier reported that the food delivery application was in talks with Masayoshi Son-led SoftBank Group to raise at least $500 million. The report suggests that SoftBank was however more inclined towards investing in Zomato and discussions with Swiggy fell through.
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According to the report, Swiggy is following the footsteps of Chinese food delivery company Meituan Dianping -- which also branched out in different businesses, especially hyperlocal delivery. Swiggy has become aggressive in its strategies over the past six months.
To enter this new business avenue, Swiggy is not only building resources within the company from scratch but is also looking for support from outside.
Swiggy may partner with, or buyout, startups in the hyperlocal delivery space. It recently bought milk delivery startup Supr Daily. This has led to speculations that Swiggy may soon enter the online grocery delivery market.
In August, Swiggy had acquired Mumbai-based Scootsy, which delivers restaurant and gourmet food, toys, beauty products and electronics.
Sriharsha Majety, co-founder and CEO of Swiggy, told the newspaper, "We are experimenting with some hyperlocal categories. We have been closely observing our consumers’ lives and we feel that there are some unique capabilities that we have that can take a shot at solving more problems, even outside the realm of food."
According to the report, while Swiggy is currently well-funded, Majety has said that it would be open to raising more funds to speed up its expansion plans.
Till date, the Bengaluru-based startup has raised $465 million -- the most by an online delivery firm. Its main competitor, Zomato, has raised around $375 million.