Swiggy’s Valuation Soars to $12.1 Billion as IPO Nears

• ByStartupStory     |    March 9, 2024

Swiggy, the popular food-delivery app poised for an IPO, has seen a significant uptick in its valuation. According to reports, US-based asset manager Baron Capital Group has elevated Swiggy’s fair value, resulting in a valuation surge from $10.7 billion to $12.16 billion. This update was disclosed through filings with the US Securities and Exchange Commission.

Baron Capital, a participant in Swiggy’s $700 million funding round in January 2022, revealed that its fund held a stake worth $87.2 million in Swiggy’s parent company, Bundl Technologies, as of December 31. This reflects a 17% increase from the previous quarter.

Swiggy’s valuation doubled to $10.7 billion in its Series K round in 2022, led by Invesco. Subsequently, Invesco valued Swiggy at $7.85 billion in the July-September quarter of 2023. The asset manager’s optimistic view is bolstered by Swiggy’s dominant 45% market share in the Indian food delivery sector and its strategic position to benefit from the evolving landscape.

Baron Capital expressed confidence in India’s food delivery industry, foreseeing substantial growth fueled by a burgeoning middle class, increased disposable income, higher smartphone penetration, and evolving consumer preferences. They noted the industry’s consolidation into a duopoly between Swiggy and Zomato, anticipating favorable conditions for future profitability and scalability.

Swiggy’s diversification efforts mirror those of its rival, Zomato. With backing from Prosus Ventures, Accel, and SoftBank, Swiggy is expanding into consumer electronics and other sectors, aiming to capture a larger share of the e-commerce market by offering 20-minute delivery for all orders.

As Swiggy gears up for its IPO around mid-2024, the public issue is anticipated to be a substantial $1 billion (Rs 8,300 crore), marking one of the most significant IPOs for a new-age tech company.

Despite Swiggy’s push into new territories, the company reported a 15% year-on-year increase in net loss to Rs 4,179.3 crore in the last fiscal year. However, operating revenue witnessed a robust surge of over 40% to Rs 8,264.4 crore, indicating the company’s commitment to growth and market dominance.

In the words of Baron Capital: “We believe India’s food delivery industry is still in its infancy and will continue to scale over the next several years…” These developments position Swiggy as a key player in the evolving landscape of India’s tech-driven food delivery sector.

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