Chinese investment holding conglomerate Tencent is planning to fund Bengaluru-based food ordering and delivery startup Swiggy. According to a report by The Economic Times, Tencent just joined a group of global investors that are looking to fund Swiggy. This comes after Swiggy has held discussions with a number of investors in its quest to raise about $500-700 million. According to the report, this investment could value the company anywhere between $2.5-5 billion and this comes weeks after it was initially reported that Swiggy could be looking to raise money for future investment. The report pointed out that it is likely that the company was offered at least one term-sheet that valued it at $2.5 billion. Also Read - Zomato invites few lucky customers to get unlimited free deliveries, no surge fees and moreAlso Read - Zomato IPO share allotment status: How to check IPO allotment status online
Tencent is not the only company that has showcased its interest in Swiggy as existing backers including Naspers. The report pointed out that the talks about the size of investment and the valuation of the company have progressed in a positive manner in last three weeks with the company planning to invest about $200-250 million out of the total size of $650 million. The report also pointed out that the discussions will continue for another 3-4 weeks before everything is finalized. Also Read - Internet down: Zomato, Paytm, Disney+ Hotstar, Amazon, Myntra, many other global services suffered massive outage
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Swiggy has also been in talks with SoftBank for a considerable investment since November last year. However, it is not clear if SoftBank will take part in the upcoming fundraising round or go for an independent investment later. The report confirmed that existing investors including Naspers, Meituan Dianping, Coatue Management, and DST Global are likely to take part in the upcoming round of investments. This is not all as some investors may also look to exit by selling their shares.
If the talks work out and things are finalized by December then it will be the third fundraising for the company for 2018. To recap, the company has already raised about $310 million in the year after its second round of funding back in June pushing its market valuation over the $1 billion to a total of $1.3 billion. The report pointed out that the company has been burning through cash with a rate of $18 million per month to compete against its primary competition Zomato. Zomato has been spending about $20 million per month on discounts and cash backs.