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Carlyle Group likely to invest $200mn in Swiggy

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Carlyle Group likely to invest $200mn in Swiggy

Carlyle could invest up to $200 million in the unicorn at a valuation of $4.5 billion.

Food delivery unicorn Swiggy is in talks to raise money from US-based private equity fund Carlyle Group, two people aware of the matter said.

If Carlyle does invest, it would mark only its second Indian technology startup bet, after backing e-commerce logistics firm Delhivery—first in 2017 and later in March this year.

As recently as December, Swiggy raised $1 billion in a round led by existing investor Naspers Ltd, the biggest ever funding round in the country’s booming food-tech sector.

Carlyle could invest up to $200 million at a valuation of $4.5 billion which Swiggy (Bundl Technologies Pvt. Ltd) is seeking, a jump from the $3.3 billion it was valued at in December, said the first of the people cited above.

While a spokesperson for Carlyle declined to comment, Swiggy did not respond to emails seeking comment.

“Swiggy’s meteoric rise in the last two years have seen heavy interest from late-stage investors including private equity funds. While it is still growing quickly and burning cash, investors see it as a long-term bet,” said a third person, an investor aware of the discussions.

Founded in 2014, Swiggy became a unicorn—a startup valued at more than $1 billion—last year. The Bengaluru-based firm has so far raised $1.5 billion from several investors, including DST Global, South Africa’s Naspers, New York-based hedge fund Coatue Management and venture capital firms Accel and Norwest Venture Partners.

Swiggy plans to use the funds to grow its delivery fleet, expand beyond food to other delivery services and ramp up its hyperlocal offerings, said the two people, both of whom spoke under condition of anonymity.

“Swiggy’s ambition is that it wants to be the only one delivering anything to your house. Food is only one part of that,” said another investor. This is evidenced by its acquisition of Supr Daily last September, which focuses on milk and grocery delivery. In February this year, Swiggy also launched Swiggy Stores, where it ties up with local grocery and mom-and-pop stores for home delivery, posing a direct threat to Google-backed Dunzo, a startup which specializes in delivery outside food. It is currently piloting the programme in Gurugram.

Over the past year, both Swiggy and rival Zomato have held discussions with Japanese investment giant SoftBank’s Vision Fund for an investment, but neither has concluded. Mint reported on 12 June that Swiggy is in advanced talks to raise as much as $1 billion from investors, including $300-500 million from SoftBank.

The Times of India reported on 6 June that Google is also expected to invest in Swiggy, with Naspers said to lead the round.

Food-tech funding has also seen a surge globally, with UK-based delivery startup Deliveroo raising $575 million from Amazon Inc., while US-based Doordash raised $600 million, valued at $12.6 billion, from investors including SoftBank, DST Global and Sequoia Capital.

Over the past year, private equity has emerged as a steady source of late-stage capital for India’s tech startups. In this month alone, PE firm General Atlantic led a $52 million investment in brokerage-free real estate platform NoBroker, while The Economic Times reported that Canadian pension fund CPPIB is investing $150 million in Delhivery, acquiring shares from existing investors. Other instances include Warburg Pincus’ investment in trucking logistics firm Rivigo and Ecom Express and CPPIB and General Atlantic’s investment in online learning firm Byju’s.

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