Blog

Editor’s Note: Norwest India partnered with Swiggy on its 10-year journey from a deliver startup to the largest tech IPO globally in 2024.

Any number of “aha” moments can convince an investor to research a new company. For me and Swiggy, it was our family’s Sunday dinner.

Around 10 years ago, I would drive to a local “Shivsagar” restaurant in Mumbai each Sunday evening to pick up our family’s favorite meal, a local delight called Pav Bhaji. One Sunday, while I was desperately trying to find parking, I thought, “Why doesn’t someone in India deliver restaurant orders to people’s homes?”

The idea made sense. Indian restaurants do not have drive-throughs like in the US, traffic in cities is heavy, and parking is impossible. At the time, online services were taking off and Indian consumers were delighted to receive them.

So, we on the Norwest India team started investigating companies that provided home food delivery. We found many companies across multiple sectors – including internet-first restaurants, kitchen marketplaces, and delivery aggregators – but none had the right combination of leadership, customer focus, business model, and technology. Then, we found Swiggy.

Founded in 2014 in Bangalore by Sriharsha Majety, Nandan Reddy, Rahul Jaimini, and Phani Krishnan, Swiggy allowed users to order food from nearby restaurants through either its website or mobile app. Unlike most of its competitors, which outsourced their delivery, Swiggy turned the model upside down and pioneered full-stack delivery facilitation. That approach allowed the company to control the entire user experience, applying technology to deliver orders promptly and reliably.

Creative Swiggy Founders Have a Clear Vision

When we first met Swiggy’s founders and team, we quickly realized they were forward-thinking business leaders with a clear vision of how they could turn delivery service into a value-added product. I found them to be innovative thinkers who were (and still are) creative in their use of technology in every aspect of the product. And their model was working: Swiggy had organically grown to about 200 restaurant clients, generating around 500 orders per day in the city of Bangalore alone.

The CEO, Sriharsha “Harsha” Majety, was a true visionary who had built a strong team. He had a deep understanding of customer needs and the subtleties of the business as well as the product focus to build a large tech company. He also attracted top-quality early investors. We believed from the start that he had the right building blocks to scale the business.

Even before its Series A was completed, we approached Swiggy in 2015 and quickly led a Series B round with a $7.5M investment at a pre-money valuation of $35M. In the run-up to the deal, I had a fascinating glimpse into the lateral thinking that is a hallmark of the Swiggy team. As part of their diligence on Norwest, Swiggy asked for reference checks with founders of three Norwest portfolio companies that had struggled. We were intrigued with the request.

We learned that Harsha asked these founders how Norwest performed under pressure when things got difficult. When they assured him that Norwest was not a fair-weather friend, but rather was a dependable partner that had added tremendous value despite the outcomes, we won Harsha’s approval in this very competitive deal. In all my years as an investor, I have never received another reference request quite like that one!

Ups and Downs (But Mostly Ups) of Swiggy’s Wonder Years

While Swiggy continued its stellar performance after our investment, “food tech” fell out of favor in the VC world for a time. We suddenly found that Swiggy needed additional capital to maintain its runway. So, at the end of 2015, we co-led an up-round with another top fund priced at the princely sum of $100M. That contrarian decision proved to be a huge win for all of us.

I will never forget Harsha making a bold prediction in the midst of those challenging times: “Don’t worry about the valuation, Niren. We will build Swiggy to $50-100B someday!”

After that round closed, Swiggy was trying to determine the right strategy for proving unit economics while demonstrating significant growth. Together with Harsha, we helped shape the strategy of simultaneously proving profitability in the city of Bangalore, showing significant growth in Hyderabad, and reducing burn in Mumbai. This helped prove unit economics at an early stage and allowed us to attract more than $2B in the next few rounds from marquee investors. This funding was instrumental in driving Swiggy’s India expansion and consolidating its leadership position.

During those years, Swiggy continued to attract amazing talent. We brought in Rahul Bothra, a brilliant CFO, in 2017, and Rohit Kapoor, an exceptional CEO of Food Marketplace, in 2022, among many other important team members.

Swiggy Pioneers an Industry

Along the way, Swiggy has diversified well beyond restaurant deliveries. Swiggy Instamart delivers groceries; Swiggy Genie runs errands and picks up needed items; and Swiggy Dineout makes restaurant reservations and offers promotional discounts. In addition, the company has expanded nationwide, made several key acquisitions, and forged strategic partnerships with banks, telcos, and retailers.

It is particularly gratifying to see that the company’s product and innovation focus—a core strength from its earliest days—continues to provide critical competitive differentiation. This includes:

• Pioneering full-stack food delivery
• Building out a delivery partner model before anyone else, which made Swiggy one of the largest employment generators in India
• Launching Swiggy Instamart, a first-of-its-kind quick commerce business in India
• Being the only company in the space with a unified “super app” that integrates all the services seamlessly within one app

Swiggy’s Impressive Growth Leads to IPO

Swiggy has exceeded our expectations in all dimensions. The company now operates in over 650 cities across India, has more than 200,000 restaurant partners and over 350,000 delivery partners, and handles an average of more than 2 million orders per day. Fiscal 2024 revenues exceeded $1.3 billion.

This success has culminated in Swiggy’s completion of a $1.4B IPO in India–the largest tech IPO globally in 2024 according to JPMorgan. We are proud to have partnered with Swiggy on its journey from a tiny startup to a publicly traded market leader. At each stage, we worked with the team to provide strategic support, including advising on strategy, recruiting key executives, evaluating M&A opportunities, exiting non-core businesses (e.g., cloud kitchens), helping improve unit economics to focus on profit, and helping the team prepare and execute the IPO.

A huge thank you to the Swiggy team for inviting us on their fabulous journey as well as for their friendship over the years. We have retained an equity position post-IPO in full confidence that the company is well-positioned for continued growth.