SoftBank and Swiggy seek CCI approval for investment

#SoftBank, #Swiggy

SoftBank and food delivery platform Swiggy have sought an approval from Competition Commission of India for a proposed investment, the final step that will help seal one of SoftBank’s biggest bets in India.

Moneycontrol had reported in April that SoftBank will invest $450-500 million in Swiggy at a post-money valuation of close to $5.5 Billion.

A person familiar with the development told Moneycontrol that a CCI nod would become necessary for this deal as SoftBank has investments globally in companies in the same segment as well as Grofers in India, which competes with Swiggy’s Instamart in the on- demand grocery delivery space.

According to the application filed by SVF II (an entity owned by SoftBank) and Bundl (which owns Swiggy), the proposed investment will not lead to any change in the competitive landscape or cause any appreciable adverseeffect on competition in India.

However, “the Parties have provided a competitive assessment of 2(two) indirectly overlapping vertical relationshipsbetween the Parties in the  (i) digital  payments services segment, and  (iii)  online  advertising services segment”, according to the notice. SoftBank is also an investor in Paytm and InMobi.

The investment from SoftBank will come on top of $800 million series J round that Swiggy recently closed, with Falcon Edge, Amansa, Think Investments, Carmignac and Goldman Sachs at a valuation of $5 Billion. Swiggy’s over $1.2 Billion fund raise will give it significant firepower at a time when rival Zomato is looking to hit the public markets.

SoftBank’s interest in the Indian food tech space is not new. For years, there has been speculation on whether it will go with Zomato or Swiggy. Zomato seemed to have an edge a few years ago after it acquired UberEats, which gave SoftBank’s portfolio company Uber, a stake in the merged entity. In fact, Alibaba’s Ant Financial, which is another early bet of Masa Son is also an investor in Zomato.

While Zomato is focused on the food delivery segment, Swiggy is also betting big on its hyperlocal delivery service Swiggy Genie, where it competes with Dunzo, Flipkart. Amazon and its online grocery service Swiggy Instamart, where it’s up against players such as Flipkart, Amazon, BigBasket, JioMart, and Grofers. While its Genie service is live in over 65 cities, grocery delivery started with Gurgaon and Bengaluru.

Interestingly, Sumer Juneja, who currently leads investments for SoftBank in India used to be on the board of Swiggy a few years ago when he was with Norwest Venture Partners, one of Swiggy’s early investors.

SoftBank’s bet on the hyper local delivery space in India also comes at a time when it has seen huge success in global investments such as DoorDash. Its $680 mn investment in DoorDash was worth $11.5 billion, when DoorDash went public in December last year.  The development also comes at a time when Zomato is inching closer to a public listing in India.

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