Unlike ordering-only platforms like foodpanda and TinyOwl, Swiggy handles food delivery as well
Foodtech companies are fast realising that big discounts will no longer work, especially in India.
Pioneers like foodpanda and overnight successes like TinyOwl have learnt it the hard way. Even Zomato, which recently added food ordering into its product portfolio, has realised food ordering needs special skills and manoeuvring. All these companies recently trimmed their operations and fired hundreds of employees.
The key challenge faced by these companies is that none of them have control over supply chain or logistics. In addition, they are forced to offer big discounts to acquire more customers. This, coupled with rising delivery costs, has put a huge burden on these startups.
This is why Swiggy’s US$35 million Series C funding from investors, including New York-based Harmony Partners and Singapore-based RB investments, is significant. Bangalore-based Swiggy is not just a food-ordering platform like foodpanda. It also handles food delivery on behalf of restaurants.
The fresh capital will be used to capture a larger share of the burgeoning US$15-billion food delivery sector in India. The funds will also go into hiring talent and upgrading technology.
“While our focus will continue to be growth across all geographies, we will now concentrate on profitability and sustainability in established markets. The end goal is to revolutionise the way India eats. We are looking to surpass existing standards, set higher benchmarks and delivering over 1 million orders a month in the near future,” said Sriharsha Majety, Co-founder and CEO of Swiggy.
Founded in August 2014 by Majety, Nandan Reddy and Rahul Jaimini, Swiggy is a food ordering platform with its own fleet of delivery personnel to pick up orders from neighbouring restaurants and deliver them to customers. These executives are equipped with smartphones powered by complex routing algorithms.
Swiggy is now present in eight cities — Bangalore, Gurgaon, Hyderabad, Delhi, Mumbai, Pune, Kolkata and Chennai — with over 5,000 restaurants listed on its platform. Apart from the existing array of brick-and-mortar restaurants on the platform, it has recently begun integrating cloud kitchens to enable a wider choice for users.
Previously, the startup had raised US$18.5 million from SAIF Partners, Norwest Venture Partners and Accel Partners through two rounds of funding. Recently, it introduced a ‘number masking’ feature on its platform to ensure that the phone numbers of the end customers remain undisclosed to the delivery staff.
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