Naspers has taken a bite out of yet another food delivery startup, with its commitment to lead and $80 million investment in the Indian online ordering and food delivery startup, Swiggy.
The global internet and entertainment conglomerate has invested in several online food ordering and delivery companies worldwide including the Brazilian company iFood, and in Mexico, SinDelantal.
Earlier this month, Naspers committed a whopping $425 million to the German food delivery business, Delivery Hero.
Swiggy compares fairly squarely with Zomato — the billion-dollar India food service that has ventured overseas and recently suffered a high-profile hack — and Delivery Hero-owned FoodPanda, while new entries from Uber and Google have added more sauce to the competition.
News of talks between Naspers and Swiggy were first reported in April, by the Indian financial publication the Economic Times.
India’s food delivery market had been a juicy target for venture capital investors for a number of years, but the tricky economics of the business have proven costly for several of them.
By the beginning of 2016 venture investors had backed roughly 400 food delivery startups with roughly $120 million in funding, according to Bloomberg Business Week.
But as the magazine reported, replacing traditional business models had proven tricky.
Luring customers with photos of tasty curries along with discounts and free delivery, they sought to disrupt the delivery networks that have existed in India since the 1890s, including Mumbai’s famously low-tech dabbawalas, who ferry 175,000 meals—some from cooks’ homes, others from central kitchens—to office workers and students daily. The time-tested deliverymen carry boxes via trains, bicycles, and pushcarts to their hungry clients, using a system of alphanumeric codes printed on reusable containers.
Indeed, the traditional businesses have proven to be so entrenched that a number of once-promising delivery businesses have been forced to shut down.
Tiny Owl was one of the businesses that closed its doors. The company had raised $27 million from white shoe venture firms Sequoia Capital and Matrix Partners, but the firms’ pedigrees were not enough to keep the doors open and the lights on.
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