Ant Financial-backed Zomato has started the process to turn its private company into a publicly-owned company. The company is planning to raise around $750 million. Meanwhile, SoftBank that was evaluating both Zomato and Swiggy to invest has decided to invest in the latter.
SoftBank is expected to back Swiggy by investing around $450-$500 million in food delivery company. This investment was decided at a post-money valuation of close to $5.5 billion
According to an ET report, Zomato is planning to raise $750 million- $1 billion by the sale of the primary stake. The company recently closed a $250 million primary funding round with another $250 million of shares being sold. Two months before raising $250 million, Zomato raised around $660 million.
According to another report by ET, SoftBank is finalising its investment plans in Swiggy. This comes after much delay mainly because SoftBank was evaluating the industry and its players before investing. In a way, SoftBank picked Swiggy over Zomato.
Both these start-ups have been aggressively scaling up as well and more like competing with each other. In 2020, Gurgaon-based Zomato acquired its rival Uber Eats in an all-stock deal. Meanwhile, Bangalore-based Swiggy has acquired startups like 48East, SuprDaily, Scootsy among others.
While Swiggy is operating in 100 Indian cities, Zomato is available in 24 countries and in more than 10,000 cities.
Both these startups were hit due to COVID-19-induced lockdown in 2020 yet that didn't stop the company from is expansion plans. While Zomato laid off 520 employees due to the COVID-19 pandemic, Swiggy let go 1,100 employees.
The aggressive competition between both startups cannot be ignored. Taking to social media yesterday, Zomato CEO Deepinder Goyal took a dig at Swiggy for delivering orders after 8 pm in Mumbai despite the lockdown-like restriction imposed in Maharashtra. Goyal attached a screenshot of Swiggy’s application offering the service and tagged Mumbai Police seeking its clarification.