Indian food delivery start-up Swiggy raised $1.25 billion in a new funding round led by SoftBank Vision Fund 2 and its existing investors Prosus, Accel Partners and Wellington Management.

The new round, which Swiggy said was “highly oversubscribed”, valued the company at $5.5bn.

Other investors including Qatar Investment Authority, Falcon Edge Capital, Amansa Capital, Goldman Sachs, Think Investments and Carmignac also participated in the round.

The investment will be used to accelerate Swiggy’s “multi-year strategy of growing its core food delivery business” and “building new food and non-food adjacencies”, the start-up said. The funds will also help it to invest in new technologies and strengthen its engineering, supply chain, product and data analytics teams.

Swiggy and other tech start-ups in India are benefitting from a massive influx of funding. Investors are flocking to tap into a digital boom as the country’s more than 500 million internet users increasingly turn to online channels amid the Covid-19 pandemic. Earlier this month, Swiggy’s rival Zomato launched a $1.3bn initial public offering while Walmart-backed e-commerce company Flipkart raised a record $3.6bn to fuel its expansion.

“The participation of some of the most visionary global investors is a huge vote of confidence … the next 10-15 years offer a once-in-a-lifetime opportunity for companies like Swiggy as the Indian middle class expands and our target segment for convenience grows to 500 million users,” Sriharsha Majety, Swiggy’s chief executive, said.

“Our biggest investments will be in our non-food businesses that has witnessed tremendous consumer love and growth in a short span, especially in the past 15 months of the pandemic.”

India’s food-tech industry is poised to grow between 25 per cent and 30 per cent annually to reach $8bn by 2023, from $4bn last year, according to a report by Google and Boston Consulting Group. However, competition in the sector is rife, with many food delivery start-ups burning cash to maintain market share and build a loyal customer base.

Amazon also entered the food delivery market in India last year but its operations are currently limited to Bangalore.