A fund overseen by Baron Capital Group, an asset manager headquartered in the United States, has increased the fair value of the food-delivery platform Swiggy to $12.1 billion. This marks a 13% increase from Swiggy’s previous valuation of $10.7 billion, which was set during its last round of fundraising in 2022.
Baron Capital, involved in the $700-million funding round in January 2022, has once again increased the fair value of its stake in Swiggy for the third consecutive time. The most recent valuation, as of December 31, 2023, was reported in filings submitted to the US Securities and Exchange Commission.
As of December 31, the fund managed by the asset manager held a stake valued at $87.2 million in Swiggy’s parent company, marking a 17% increase from $74.4 million in the previous quarter. The initial value of the stake at the time of acquisition was $76.8 million.
Crossover funds, which allocate investments to both publicly traded and privately held companies, regularly reassess the valuation of their portfolio firms. This determination of fair value takes into account various factors such as significant events within a company or the comparative performance of similar companies in the stock market.
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As of December 31, Baron Capital Group, through two of its funds, also held stakes worth more than $11 million in Zomato, Swiggy’s chief rival.
From September 30 to December 31, the share price of Gurugram-based Zomato surged by 22%. By Friday, its market capitalization had reached INR 1.41 lakh crore (equivalent to over $17 billion).
Baron Capital isn’t the sole investor to have adjusted Swiggy’s fair value in its records. On January 4, it was reported that Invesco had raised Swiggy’s valuation to $9.5 billion, as of October 31, 2023.
Continue Exploring: Invesco raises Swiggy’s valuation by 9% to $8.5 Billion, marks second consecutive increase
Swiggy is also preparing for a $1-billion initial public offering (IPO). On January 23, it was reported that the company’s IPO is anticipated to include an offer-for-sale component valued at a minimum of $600 million, allowing existing investors to sell off a portion of their stake.
In December, Prosus, the largest shareholder of the firm, announced that Swiggy had reduced its losses by 35% compared to the previous year, with losses amounting to $208 million for the half-year ending on September 30.
Continue Exploring: Swiggy may file IPO by fiscal year end, plans to raise capital with combination of offer-for-sale and new issue; Prosus contemplates stake reduction
Swiggy and Zomato are in fierce competition for a larger portion of their primary food-delivery market. Meanwhile, industry experts and analysts highlight their quick-commerce divisions as the driving force behind the next growth phase. Zomato possesses the quick-commerce company Blinkit, while Swiggy operates within this sector through its Instamart vertical.
As per a January report from Bernstein, Zomato commanded a 54% market share in terms of gross merchandise value (GMV) in the food delivery segment, whereas Swiggy held 46%.
“Zomato’s active user base continues to grow faster than Swiggy. We expect that Zomato stands to gain higher incremental GMV as compared to Swiggy,” it had noted.