In a significant move within the food delivery sector, Chinese e-commerce giant Meituan has sold more than $200 million of its stake in Indian food delivery platform Swiggy. This secondary deal, which took place last week, has attracted attention as it comes just weeks before Swiggy’s anticipated public listing.
Details of the Transaction
According to sources familiar with the matter, Meituan divested a portion of its stake for an estimated valuation of around $10 billion. The exact percentage of the stake sold remains undisclosed, but it is known that Meituan, through its investment vehicle Inspired Elite Investments, currently holds a 3.88% stake in Swiggy.
- Transaction Highlights:
- Amount Sold: $200-220 million
- Valuation: Estimated at $10 billion
- Current Stake: 3.88% held by Meituan
Meituan’s initial investment in Swiggy dates back to 2018, with a subsequent increase in its holding during a funding round in 2020. This latest sale is part of a broader trend, as several investors, including Elevation Capital and Norwest, are also reducing their stakes in anticipation of Swiggy’s public debut.
The Road to Public Listing
Swiggy is gearing up for its public offering, aiming to raise $450 million through a fresh issue of shares, alongside an undisclosed amount from an offer for sale (OFS). The company has shown impressive growth, reporting a 36% increase in revenue for FY24, which reached Rs 11,247 crore, up from Rs 8,265 crore in FY23. Additionally, Swiggy has managed to cut its net losses by 44%, bringing them down to Rs 2,350 crore.
Financial Performance Snapshot
| Metric | FY23 (Rs Crore) | FY24 (Rs Crore) | Change (%) |
|---|---|---|---|
| Revenue | 8,265 | 11,247 | 36% |
| Net Losses | 4,200 | 2,350 | -44% |
This financial performance positions Swiggy favorably as it prepares for its IPO, especially in a competitive landscape where rivals like Zomato have recently achieved profitability.
Competitive Landscape
Zomato, Swiggy’s primary competitor, reported a revenue of Rs 12,114 crore in FY24, benefiting from its diversified offerings, including BlinkIt and Hyperpure. Zomato’s market capitalization has nearly doubled since its public listing in July 2021, rising from $13 billion to approximately $27.3 billion today. This growth trajectory highlights the intense competition in the food delivery market, where both companies are vying for dominance.
As Swiggy prepares for its public debut, the market will be closely watching how these developments unfold, particularly in light of Meituan’s recent stake sale and the broader investor sentiment surrounding the food delivery sector.
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