In what is being seen as a distress sale, food ordering and delivery company Swiggy has acquired on-demand platform Scootsy in an all-cash deal.
A PTI report said the acquisition of Scootsy is for approximately Rs 500 million. Founded in 2015, Mumbai-based Scootsy, which delivers food, beauty products, home décor and electronics, among other things to customer’s doorsteps, had only raised a pre-Series A funding of $3.6 million last year, in a round led by Agnus Capital and Khattar Holdings. The start-up has not been able to raise any institutional funding in the past year even though industry leaders in the hyperlocal food space have been pumping in cash.
While Swiggy entered the elite Unicorn club in June after raising $210 million in fresh funding led by South African internet giant Naspers and Russian billionaire Yuri Milner-led investment firm DST Global, Zomato received $150 million from Alibaba’s subsidiary Ant Financials in March. However, several small start-ups in the food tech space have shut shop as they failed to raise funding. Start-ups such as Yumist and TinyOwl had to wind up businesses as they failed to hold ground in front of competitors due to lack of fund, poor operations or bad strategy.
After the acquisition, Scootsy will continue as an independent app and Swiggy will help the brand expand to about five newer cities. Scootsy currently claims of a client base of 200,000 and an average order size of Rs 900. The Bengaluru-based Unicorn will, in turn, add more curated restaurants to its existing network of 40,000 restaurants.