Skift Take
Swiggy emerged from India's delivery battles this summer as the sector's second unicorn. But to keep up with competition, even unicorns need outside help to fund growth that delivery fees wouldn't come close to funding.
— Jason Clampet
Naspers Ltd. is planning to increase its stake in Indian online food-delivery business Swiggy as the startup plots its third fund-raising round of the year, according to people familiar with the matter.
Africa’s largest company by market value has indicated that it intends to support a financing that could raise more than $600 million, Swiggy’s biggest to date, according to the people. There’s also an opportunity to buy stakes from investors such as Bessemer Venture Partners, they said, asking not to be identified as the information isn’t public.
Tencent Holdings Ltd., the Chinese internet giant in which Naspers owns a 31 percent stake, is also planning to invest in the fundraising, according to one of the people.
Naspers declined to comment. Swiggy, Tencent and Bessemer didn’t immediately respond to emails seeking comment. The story was first reported by VC Capital website.
Swiggy’s value has risen to more than $2 billion after Cape Town-based Naspers led two previous funding rounds to become the firm’s biggest shareholder, according to the people. Naspers had a 22 percent stake as of the end of March. The company hasn’t made a final decision on whether to take part in the latest financing and may yet opt against it, one of the people said.
Naspers has targeted India for investments as the company seeks to replicate a blockbuster early bet on Tencent. The company made a $1.6 billion profit from the sale of its 11 percent stake in Indian e-commerce startup Flipkart earlier this year, and also has shares in travel business MakeMyTrip and classifieds business OLX.
Food delivery has been a favorite industry of Naspers, with assets including Germany’s Delivery Hero AG and iFood in Brazil. The company plans to invest in another Indian food company called Hungerbox, a tech-enabled corporate catering company, said one of the people.
Naspers shares have fallen 22 percent this year, valuing the company at 1.2 trillion rand ($83 billion), as a record slump in Tencent’s share price dragged down its South African investor. Naspers fell 4.6 percent in Johannesburg on Tuesday.
©2018 Bloomberg L.P.
This article was written by Saritha Rai and Loni Prinsloo from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to [email protected].
