BENGALURU (Reuters) - SoftBank-backed Indian food delivery startup Swiggy said on Thursday it would invest $700 million in its grocery delivery service Instamart, to strengthen its footing in a highly competitive domestic market.
First launched in the Indian cities of Bengaluru and Gurugram last year, Instamart is set to reach an annualised gross merchandise value run rate of $1 billion in the next three quarters, Swiggy said.
The service, which spans 18 cities in the country and serves more than 1 million orders per week, will also start 15-minute deliveries in top cities by January 2022.
Home delivery companies in India were hit by a sudden pandemic-related lockdown last year as health concerns discouraged people from ordering in, but as the initial hesitancy eased, food and grocery delivery apps like Swiggy reaped the benefits of fewer people stepping out.
The Indian online grocery market is estimated to reach $18.2 billion in 2024 from $1.9 billion in 2019, according to government estimates.
Instamart competes with Tata-owned BigBasket, Grofers, in which Swiggy's larger rival Zomato Ltd holds a stake, Amazon.com Inc's Amazon Fresh and Reliance Industries' JioMart.
Swiggy Chief Executive Officer Sriharsha Majety said in a statement that the company's food delivery business was currently at a $3 billion annualised gross merchandise value run rate.
Separately, Bloomberg News on Wednesday reported https://bloom.bg/3IdNze7 that Swiggy is nearing a $700 million fund raise led by Invesco.
(Reporting by Rama Venkat in Bengaluru; Editing by Devika Syamnath)