The emerging foodtech platform Swiggy that is consistently in news for a long time, has now announced the acquisition of a Mumbai-based on-demand delivery firm known as Scootsy.
The deal is a mostly-cash contract and this acquisition is worth about Rs 50 crore (under $8 million). This acquisition is expected to see Scootsy’s brand name being retained in Mumbai. However, it has not been clarified what the role of Scootsy’s founder team will be in the food delivery firm. It may happen that they join Swiggy’s management.
Scootsy is an on-demand delivery firm in Mumbai which was founded in 2015. It has secured about Rs 25 crore as of now from Agnus Capital and Khattar Holdings.
“The funding crunch has almost crippled Scootsy. The strength of riders has reduced impacting deliveries and the lack of capital has hit the business hard,” said a person aware of the matter.
The three-year-old firm aggregates premium dining options catering to a niche, premium, high ticket size food delivery play in the city. About 25-30% of its revenue generates from non-food hyperlocal delivery operations including daily essentials, flower and gifting.
Post the acquisition, a major portion of the cash from of the deal will be deployed in the payment of salaries to the Scootsy’s employees who haven’t been paid for over 3 months.
At present, Scootsy delivers around 2000 orders per day and has around 700 delivery agents in Mumbai across its food and non-food delivery space. The company has a stronghold in South Mumbai, Lower Parel and some parts of Bandra where several premium dining restaurants are located.
On the other hand, if we talk about Swiggy, it delivers about 5,00,000 orders per day and has a fleet size of 55,000 all over the country. This acquisition will add value through Scootsy’s premium customer base, which it is looking to tap into for other delivery categories as well. Swiggy is making efforts to enter the hyperlocal market.