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Foodtech Startups

Swiggy closes its online grocery marketplace and will now focus on Instamart

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Swiggy basket

Food delivery platform Swiggy has closed its online marketplace for groceries. The service had gained much traction during the pandemic induced lockdown.

It plans to replace the grocery marketplace with ‘Instamart’, its grocery delivery initiative powered by cloud stores across cities.

The bright future of dark stores

Swiggy’s main competitor Zomato also stopped its grocery delivery service, which was also scaled up during the lockdown.

While Swiggy Stores is not available, users can order grocery and other items through Swiggy Genie, which also lets users send packages and documents across the city.

Swiggy had opened its dark stores under the brand name ‘Urban Kirana’ in April 2020. It was later rebranded to Instamart. Currently operational in Gurugram and Bengaluru, Instamart claims to deliver groceries and other items in less than 40 minutes.

The dark store model has turned out to offer better margins and enabled faster deliveries for the company. In Bengaluru, there are about 10 dark stores operated by the company covering 80% of the city within 5-6 km range each.

The Major League

The e-grocery segment has become hyper-competitive with Reliance’s JioMart overtaking BigBasket to become the largest online grocery marketplace in the country. In December 2020, JioMart delivered more than 7,00,000 orders a day, while BigBasket and Grofers did 1,20,000 and 1,15,000 respectively.

This year, the segment will also see JioMart being embedded into WhatsApp and Tata’s entry by acquiring a majority stake in BigBasket. E-commerce majors Amazon and Flipkart are also ramping up their grocery segment with diversified brands and vigorous marketing.

Also read: Swiggy partners with the government to bring 36,000 street food vendors online

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Foodtech Startups

Zomato plans to raise $500 million as it prepares for IPO

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Food delivery platform Zomato is set to close a funding round, raising $500 million (₹3,653 crore) as it prepares for its Initial Public Offering (IPO).

As per a report by ET, this fundraise will value the company at $5.5 billion (₹40,188 crore) and it plans to debut in the public market in June of this year. Zomato is expected to have $1 billion (₹7,306 crore) in cash after this transaction.

Existing investors Tiger Global, Kora Investments, Steadview Capital, Fidelity, Bow Wave, and Vy Capital have joined with a new entrant Dragoneer Group to infuse $250 million (₹1,826 crore) in primary cash.

The rest of the amount has been raised through a secondary sale of shares by Chinese investors Ant Group and Sunlight Fund.

Peak Moment

A person familiar with the internal functioning of the company, has stated that the IPO this year could value the company at $6 -$8 billion (₹43,841- ₹58,455 crore ).

Goldman Sachs, Morgan Stanley, Credit Suisse and Kotak Mahindra Bank are appointed to guide them through the process.

Last year has been a roller-coaster ride for Zomato. The pandemic induced lockdowns completely dismantled their business, which led to massive job and pay cut. But during the following months, the food-delivery segment witnessed a tremendous growth because of the restrictions and safety protocols in restaurants.

Online food delivery crossed its pre-pandemic records to register peak demand during the days between Christmas and New Year.

New structure

Another important factor has been the tension between India and China following the violent stand-off in June. Up until December 2020, when Zomato had raised $660 million (₹4,861 crore), Chinese tech giant Alibaba’s Ant Group owned 25-26% stake in the company.

However, if this reported transaction goes through, InfoEdge will become the largest shareholder in Zomato with about 17% stake.

After acquiring UberEats in January last year, Swiggy is the only major competitor for Zomato in the Indian market. Recently, Zomato stepped into sports and fitness service by acquiring Fitso, a full-stack sports platform.

Also read: Swiggy closes its online grocery marketplace and will now focus on Instamart

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Foodtech Startups

Food delivery major Zomato acquires full-stack sports platform Fitso

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Foodtech unicorn Zomato has acquired full-stack sports platform Fitso for an estimated amount of ₹100 crore ($13.6 million).

According to a report by Entrakr, the deal has just been internally announced and Fitso’s founders and the team will join Zomato.

Fitness and Coaching

Fitso was founded by Naman Sharma (ex-Zomato), Rahool Sureka (ex-UrbanClap, Yelp) and Saurabh Aggarwal (ex-Flipkart) in 2015. Fitso’s app lets users choose a sport and book a time slot at their facility.

It has facilities in Delhi-NCR and Hyderabad which provide sports, swimming and other athletic training from certified coaches. Fitso provides coaching and facilities for Football, Basketball, Cricket, Badminton, Tennis, Squash, Table Tennis and other sports.

The platform has two major applications – Fitso Sports and Fitso Seals, which provides premium swimming classes.

Till now, the Gurugram-based company has raised $1.7 million (₹12 crore) from SRI Capital, Pankaj Chaddah, Helion Ventures’ founder Ashish Gupta and AppyHigh.

The platforms claims to have 2,000 paid users, as of December 2020.

Major Order

According to the report, the size of the deal is in range of ₹80 crore ($10.9 million) to ₹100 crore ($13.6 million) and the transaction consists of both equity and cash.

This is Zomato’s first major acquisition after UberEats in January 2020.

Just last month, Zomato raised $600 million (₹4,390 crore) in a financing round which took its valuation to $3.9 billion (₹28,537 crore). The company is planning to go public this year, though it might have to wait until it becomes profitable.

Also read: Swiggy closes its online grocery marketplace and will now focus on Instamart

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Foodtech Startups

Delivery startup Dunzo raises $40 million from Google, Lightbox and others

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Dunzo Delivery illustration

Hyperlocal commerce and delivery startup Dunzo has raised $40 million (₹292 crore) in Series E funding, from new and existing investors.

Google, Lightbox, Evo Evolvence, Hana Financial Investment, LGT Lightstone Aspada, and Alteria and others participated in the round.

Fast local delivery

The Bengaluru-based startup was founded by Kabeer Biswas, along with Co-founders Ankur Agarwal, Dalvir Suri, and Mukund Jha in 2014.

It delivers food, grocery, meat, medicine, wellness products and enables its customers to send packages to one another within a city.

Currently operating in Bengaluru, Hyderabad, Chennai, Pune, Gurugram, Jaipur, Mumbai and Delhi, Dunzo also operates a Bike Taxi service in Gurugram.

From the initial phase, it has been backed by Google, Blume Ventures, Aspada Ventures and Alteria Capital. In fact, it was the first startup in India to get a direct investment from Google.

Fast and sustainable growth

Over the past six months, Dunzo has delivered for 300 neighbourhoods across these eight cities and seen a 2X growth over the past year. Its annual Gross Merchandise Value (GMV) has reached $100 million (₹731 crore) in 2020.

In a press statement, Caesar Sengupta, VP of Google said, “As merchants go digital, Dunzo is helping small businesses in their digital transformation journey in support of business recovery.”

The company will use the fresh capital to focus on sustainable growth in its fastest growing cities Mumbai, Chennai and Pune.

“As a team, we are more focused than ever to enable local merchants to get closer to their users and build one of the most loved consumer brands in the country,” said Kabeer Biswas, CEO and co-founder of Dunzo.

The platform claims to serve 1 million (10 lakh) deliveries each month.

Also read: Dailyhunt becomes a unicorn after investment from Google

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