Baron Capital Slashes Swiggy’s Fair Value by 34% to $50.9
- ByStartupStory | May 16, 2023
Baron Capital, the US-based asset management firm, has reduced the valuation of its stake in Swiggy by 34% to $50.9 million, as stated in the filings submitted to the US Securities and Exchange Commission (SEC) as of December 31, 2022.
In January 2022, the US fund made an investment in Swiggy during the company’s $700 million funding round. Through its Baron Emerging Markets Fund, the firm currently owns a stake of approximately 0.75% in the food delivery firm.
This recent valuation reduction represents the third instance of an investor lowering the value of its investment in Swiggy. Media reports indicate that Invesco devalued its holding to $5.5 billion in May of the previous year. Additionally, last month, the US-based investment management firm reduced the valuation of its stake in Swiggy from $10.7 billion to $8 billion, as revealed in its regulatory filings.
The decrease in valuation reflects a cautious stance among investors, who are reassessing the value of their investments in response to challenging macroeconomic conditions. Concerns about the business prospects of Swiggy’s competitor, Zomato, have arisen due to volatility in its stock price, particularly in the face of the economic downturn and the subsequent decrease in consumer confidence.
In a similar trend, BlackRock, one of the key investors in BYJU’S, has halved the valuation of its stake in the edtech company to approximately $11.5 billion. Additionally, it was reported by YourStory last week that Neuberger Berman, a US fund, has reduced the valuation of its holdings in healthtech firm Pharmeasy and fintech firm Pine Labs.
Swiggy’s revenue increased twofold in FY22, but the company also reported a larger loss. Its expenses surged to Rs 9,574 crore from Rs 4,139 crore last year due to higher product procurement and advertising costs, resulting in a loss of Rs 3,629 crore for FY22 compared to a loss of Rs 1,617 crore in FY21. However, one of its biggest investors, Prosus, noted that Swiggy’s food delivery arm experienced a 40% growth in gross merchandise value (GMV) during the January-July period last year.
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