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Swiggy’s valuation jumps to $8.3 billion as Invesco hikes up its stake

Swiggy, India’s leading food delivery platform, has seen its valuation soar to $8.3 billion, as US-based investment firm Invesco raised its stake in the company for the second time in a row. This marks a significant recovery for Swiggy, which had faced valuation cuts by Invesco and other investors last year.

Invesco leads the valuation boost for Swiggy

According to regulatory filings, Invesco has increased the fair value of its shares in Swiggy by 43%, from $5.5 billion in July 2023 to $8.3 billion in January 2024. This is the second consecutive time that Invesco has marked up Swiggy’s valuation, after slashing it twice in 2023.

Invesco had led a $700 million funding round for Swiggy in January 2022, valuing the company at $10.7 billion. However, in the wake of the Covid-19 pandemic and the intense competition from rival Zomato, Invesco had reduced Swiggy’s valuation to $8 billion in October 2023, and further to $5.5 billion in July 2023.

The latest valuation hike by Invesco reflects the improved performance and prospects of Swiggy, which has diversified its offerings beyond food delivery to include grocery delivery, cloud kitchens, and hyperlocal services.

Swiggy outshines Zomato in the valuation race

With the new valuation, Swiggy has overtaken Zomato, its chief competitor and the only publicly listed food delivery company in India. Zomato, which had a blockbuster IPO in July 2023, had seen its market capitalization peak at $17 billion in August 2023. However, since then, Zomato’s share price has plummeted by more than 50%, closing at Rs 91 per share on Monday, January 4, 2024. This translates to a market cap of $9.64 billion, lower than Swiggy’s current valuation.

Swiggy’s valuation jumps to $8.3 billion as Invesco hikes up its stake

Zomato has been facing challenges such as regulatory uncertainties, rising costs, and slowing growth. The company had reported a net loss of Rs 1,066 crore for the quarter ended September 2023, up 36% from the previous quarter. Zomato had also announced its exit from the grocery delivery segment, citing low margins and high customer acquisition costs.

Swiggy, on the other hand, has been expanding its presence in the grocery delivery space, with its quick commerce platform Instamart. Swiggy claims that Instamart is set to reach an annualized gross merchandise value (GMV) run rate of $1 billion in the next three quarters. Swiggy has also been investing in the broader ecosystem, with reports of its plans to back bike taxi startup Rapido and cloud kitchen startup Rebel Foods.

Swiggy gears up for IPO amid favorable market conditions

The valuation boost by Invesco comes at a time when Swiggy is preparing for its initial public offering (IPO), which is expected to take place in the second half of 2024. Swiggy is reportedly aiming to raise $1.5 billion at a valuation of $15 billion in its IPO.

Swiggy may benefit from the favorable market conditions for tech startups in India, which have witnessed a record-breaking fundraising and listing spree in 2023. According to data from Venture Intelligence, Indian startups raised $32.6 billion in 2023, up 140% from 2022. Moreover, 33 startups went public in 2023, raising $11.3 billion, compared to just six IPOs in 2022.

Swiggy may also leverage its strong brand recognition, loyal customer base, and diversified revenue streams to attract investors. Swiggy claims that its food delivery business has nearly doubled in gross order value (GOV) in the last year, and that it has over 250,000 restaurant partners and 200,000 delivery partners across 500 cities in India.

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