Invesco, the Atlanta-based investment firm, has maintained the valuation of the Indian foodtech giant Swiggy at $5.5 billion as of April 30, 2023, as per regulatory filings.
The investment firm, which spearheaded Swiggy’s $700 million funding round in 2021, has reduced the valuation of the foodtech giant twice in recent months. The current valuation has dropped from the $10.7 billion it achieved during the aforementioned funding round.
Read More: Investment firm Invesco lowers Swiggy’s valuation again, marking it down to $5.5 Billion
Based on the filings submitted by Invesco, the investment firm holds 28,844 shares in Bundl Technologies, the parent company of Swiggy. These shares are valued at $95.46 million, amounting to $3,309.5 per share. The filings also reveal that Invesco initially acquired this stake for $190.5 million, thereby valuing the foodtech company at $10.7 billion. This valuation represents a significant decline of 49.88% from its original value.
Interestingly, the markdown in valuation by Invesco has caused Swiggy’s worth to fall below the market capitalization of its competitor, Zomato. With the recent surge in Zomato’s share price, its market cap reached $7.68 billion when the stock markets opened on June 27. This figure comfortably surpasses Invesco’s latest valuation for Swiggy.
In recent months, Invesco is not the sole investor to have marked down the value of the foodtech giant. Baron Capital, another investor in the company, has reduced Swiggy’s valuation to $6.5 billion as of March 31, 2023.
Indian startups have recently experienced significant reductions in their valuations as investors respond to challenging macroeconomic conditions. A notable example is BlackRock, which slashed BYJU’S valuation by 62% in May, reflecting the impact of these adverse circumstances.
Additionally, the epharmacy unicorn PharmEasy and Pine Labs also faced valuation reductions recently. Vanguard, in May, lowered the valuation of the startup Ola by 35% to $4.8 billion. These valuation cuts highlight the impact of current market conditions on these companies.
According to Swiggy’s statement in May, its food delivery segment achieved profitability as of March 2023. Although Swiggy has not released its financial statements for the fiscal year 2023, its competitor Zomato also announced that its business, excluding the quick commerce vertical, achieved positive adjusted EBITDA in the fourth quarter of fiscal year 2023.
Read More: Swiggy’s strategic initiatives pay off as food delivery business turns profitable
Swiggy has been diligently implementing aggressive cost-cutting measures to attain profitability. As part of this strategy, the company recently made impactful decisions, including the termination of 380 employees earlier this year. Furthermore, Swiggy has taken steps to streamline its operations by discontinuing business verticals that did not find a suitable product-market fit, with Handpicked being one of them.
According to a recent report by JM Financial, Swiggy and Zomato have become crucial entities for the restaurant industry in India. The report highlights that these food delivery incumbents are now considered “indispensable” as they contribute nearly one-third of the revenue generated by eateries in the country. This underscores the significant role that Swiggy and Zomato play in the success and sustenance of the Indian restaurant industry.
Read More: Food delivery aggregators contribute one-third of eateries’ revenue: JM Financial report
Moreover, industry experts do not consider the government’s Open Network for Digital Commerce (ONDC) as a significant immediate concern, which strengthens the argument in favor of the two leading food technology giants.
Read More: Brokerage firm Motilal Oswal dismisses immediate threat to Zomato from ONDC