The online food delivery industry in India will see a major shake-up, as Bangalore-based Swiggy has acquired Scootsy, a Mumbai-based food delivery platform that is one of its competitors in the industry. The acquisition is an all-cash deal worth Rs 50 crore, and will see the Scootsy brand name and identity being retained in Mumbai, the smaller company’s key market, ET Tech reports.
While Scootsy has seen some success in Mumbai and has managed to raise funding as well, it’s recently fallen behind the competition, including Swiggy, Zomato Order, and Uber Eats. Post the acquisition, the Scootsy name and operations will be retained in Mumbai, although bigger decisions will now obviously move to the Swiggy management team. It is believed that Scootsy’s employees have not been paid their salaries for the past three months, and much of the funding will go to clearing these dues.
The deal will help Swiggy take the fight to its key competitor Zomato, using Scootsy’s premium approach that has helped it gain a foothold in South Mumbai and other parts of the city that are considered high-value areas. Swiggy has an average order value of Rs 350, while Scootsy has a higher Rs 750 average. While Scootsy delivers 2,000 orders per day, Swiggy is estimated to be delivering 500,000 orders per day across the country.
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Scootsy could now be turned into a hyperlocal-focused brand, or could change its approach to being a purely premium offering, while Swiggy will continue with its existing brand approach. The Scootsy brand could also spread to more cities with the acquisition. Nonetheless, the acquisition comes relatively cheap for Swiggy, considering the huge attention and growth scope for the online food ordering space in India.