Swiggy and Zomato are competing to raise fresh capital of around $500-700 million from existing and new investors, according to a report by The Times of India.
Bengaluru’s Swiggy is looking at a valuation of $4 billion while Gurugram-based Zomato is eyeing a valuation of $3.1 billion, sources told the paper.
Swiggy is trying to raise $500-700 million from existing investor Naspers and get Google to participate in this funding round. Zomato is seeking about $600-700 million.
The talks come at time when both companies are facing losses due to huge discounts, aggressive expansion of services and entry into new cities.
Moneycontrol could not independently verify the story.
Zomato, Swiggy, Naspers and Google declined to comment when approached by TOI.
Swiggy has asked SoftBank for $300-500 million, according to a Mint report.
If a deal goes through, it would be SoftBank's first investment in India's food technology space.
“Both companies are out in the market at the same the same time, which allows potential investors to evaluate them against each other,” an investor told TOI.
Both companies are seeking valuations much higher than the previous funding rounds, the report said.
Swiggy had in December raised $1 billion in a funding round led by Naspers, valuing the company at $3 billion. Chinese conglomerate Tencent also participated in the investment round.
Japanese conglomerate SoftBank has been in talks with both Swiggy and Zomato since August 2018, but, it is yet to make a final decision, media reports suggest.
Zomato’s last funding round valued the company at $2.1 billion. Goldman Sachs is handling the transaction for Zomato, the report said.Both Swiggy and Zomato clock over 1 million orders per day.