Swiggy acquires Scootsy in all-cash deal valued at Rs 50 crore

MUMBAI: Increasing competition in the domestic food-delivery sector has whetted the appetite for acquisitions in key markets such as Mumbai. On Thursday, food-delivery firm Swiggy said it has acquired Mumbai-based on-demand delivery firm Scootsy.

Under the all-cash deal — valued at about Rs 50 crore (under $8 million) by several industry executives — Scootsy’s brand name is being retained in Mumbai.

Another food-delivery firm, Ola-backed Foodpanda, is in the last leg of talks to acquire Mumbai-based cloud-kitchen player Holachef, which shut down operations about three months ago. ET was the first to report acquisition talks between Foodpanda and Holachef in April.


Both developments come after a long-drawn struggle by the smaller firms to raise capital in a market that has seen the top two players — Swiggy and Zomato — amass large amounts of capital.

Email queries sent to Foodpanda and Holachef remained unanswered as of press time.

For Swiggy, which is looking to enter the hyperlocal delivery market, the deal adds value through Scootsy’s premium customer base, which it is looking to tap into for other delivery categories. It will also add heft to Swiggy’s network of 40,000 restaurants.

Scootsy delivers close to 2,000 orders each day aided by some 700 delivery agents across its food and nonfood delivery operations in south Mumbai, Lower Parel and some parts of Bandra. Swiggy delivers about 5,00,000 orders per day and has a fleet size of 55,000 all over the country.

Besides, Scootsy’s average order value of over Rs 750 as compared with the Rs 350 that Swiggy clocks on its platform, means the deal offers Swiggy a hefty play into both the midlevel and the premium-level market and will give it an edge over rival Zomato when it comes to capturing market share outside their respective home grounds.

Three-year-old Scootsy has raised about Rs 25 crore so far from Agnus Capital and Khattar Holdings. While the firm aggregates premium dining options catering to a niche, premium, high-ticket-size food delivery play in the city, 25-30% of its business comes from non-food hyperlocal delivery operations including daily essentials, flowers and gifting.

For Foodpanda, the acquisition of Holachef is likely to see the latter’s founding team join its management leadership, industry executives said.

“While no amount has been finalised for the acquisition yet, the proceeds from Foodpanda will likely be just to cover pending dues and absorb some of the staff,” said a person aware of Holachef’s negotiations.

Four-year-old Holachef’s fire sale is likely to return nothing to investors, with both Kalaari Capital and India Quotient having resigned from the board of directors of the firm over six months ago.

For Foodpanda, Holachef’s brand name and staff will help kictstart its cloud kitchen play, where peers Zomato and Swiggy already have a lead.