
Online food delivery startups are again seeing hyper funding and cut-throat competition, mirroring what had happened in the happening years of 2014-15. Research portal Statista had predicted that revenue in this segment will post a CAGR of 16.7 per cent in the next few years, resulting in a market volume of $5.7 billion by 2022. While Uber is expected to invest $200 million into its food delivery business, UberEats, here in India, both Zomato and Swiggy are in talks to shore up $200 million each from risk investors.
On the heels of news reports that Softbank wants to invests in Zomato, there is another report in business papers that Zomato is also talking to Alibaba for funds. Three of these players also have Foodpanda to fight with, which was recently bought out by Ola. The homegrown ride-hailing company said it was earmarking $200 million to grow Foodpanda.
Industry watchers said with fresh capital coming in, it will lead to increased discounts and promotions to lure consumers. “Between the four companies, there’s almost $800 million to $1 billion of funds likely to be allocated to this sector. The cash burn is going to go up at a fast clip as each of them wants to outbid the other. Swiggy, Zomato and UberEats and Foodpanda under Ola has a far bigger war chest.”

Uber, which is committing $200 million to grow its food delivery vertical, said it will expand into tier-2 cities in India. The food aggregator app, which was launched in May last year, is currently present in Mumbai, Delhi, Pune, Chandigarh and six other markets. UberEats’s CEO Bhavik Rathod, head of UberEats India has said, “India remains one of the most important markets for UberEats globally and is the fastest growing market in the Asia-Pacific region.”
Alibaba’s payment affiliate Ant Financial has $150 million in Zomato earlier this year. It is now directly looking to back the Gurgaon company in a $200-million financing round. Zomato’s valuation is likely to go up from $1.1 billion to $1.5 billion.
According to CrunchBase, by February 2018, Swiggy had $255.5 million in funding. Latest reports say Swiggy’s recent round of funding to the tune of $200-million from various investors has closed, valuing it at $1 billion after the investment.
Swiggy, the largest online food delivery app, is clocking about 10 million orders monthly while Zomato registered approximately 7.5 million per month. Latest numbers for Foodpanda were 40,000 monthly orders, while UberEats was at 20,000-25,000, people who track the sector said.

Unlike its competitors in the space, Zomato is profitable and is already operational in 24 countries across the globe. It also claims to have hit milestones in each of its auxiliary businesses – be it online food ordering, table reservations or its cherished Gold program.
According to Zomato’s founder and CEO Deepinder Goyal, the company’s core advertising business in India, Southeast Asia, and the Middle East has been generating enough cash to cover for the millions of dollars of investments that is made into the rest of the regions and its new businesses.
“We demonstrated that our business can generate profits – almost all throughout the year, we hit EBITDA breakeven globally across all our business, while maintaining good growth levels,” he had said in a company blog post.