In huge development and investment news, Amazon India is considering an investment in the popular online food delivery startup, Swiggy. According to a report by Economic Times, the two companies have had several rounds of discussions over the past three months.
Apparently, Swiggy has drawn the attention of other investors as well, including Ele.me – the Alibaba backed Chinese food delivery venture. One of the sources in contact with ET said that, “Everyone is talking since they are doing really well but it is not certain that a deal will be closed.” They also confirmed that other Chinese investors have also approached Swiggy about investment opportunities.
According to people aware of Amazon’s operating style, deals typically take 3-4 months to close. Amazon India and Swiggy declined to comment on what they described as “market speculation”.
So far, Swiggy has raised $72 million in investments so far, from Accel Partners, Norwest Venture Partners and Bessemer Venture Partners, along with a Series C funding from New York-based investors. It’s reported that Swiggy executives have held at least three rounds of meetings with Amazon India. The Seattle-based company has expressed interest in the strong consumer focus demonstrated by Swiggy, the sources told ET.
Amazon previously backed hyperlocal services company, Housejoy, as well as retail gift card startup, QwikCilver. An investor in the hyperlocal market said, “For Swiggy, getting a high order density will lead to better utilisation of the hyperlocal fleet leading to a sustainable business. After food, the next logical expansion would be grocery and Amazon Now does grocery, so maybe that’s the synergy.”
Recently, in Hyderabad only, Amazon Now launched the grocery services, with plans to expand to other parts of the country by the end of the year. Investing in Swiggy might help them expand even faster. At the same time, Swiggy is looking to expand its restaurant base across cities and break even at an operational level. Despite restaurants pulling out of food delivery services, this is a big break for Swiggy.