After two rounds of evaluation, Invesco, an investment firm headquartered in Atlanta, significantly increased the valuation of the Indian foodtech startup Swiggy by over 42%, reaching $7.85 billion by the end of July.
The updated valuation of the Bengaluru-based startup, Swiggy, was revealed in recent financial disclosures by Invesco. Invesco had previously set Swiggy’s valuation at $5.5 billion at the close of April 2023.
The Atlanta-based investment firm holds 24,844 shares in Swiggy, amounting to a total value of $135.6 million. This valuation translates to a per-share value of $4,703.
This marks a significant upturn for the foodtech giant following two successive reductions in valuation by the investor. In January 2022, Invesco initially invested in the company, leading a $700 million funding round that valued the company at $10.7 billion.
The Atlanta-based firm revised the company’s valuation downward to $8 billion in September 2022, and subsequently reduced it even further to $5.5 billion by the close of April 2023 in its financial records.
Nonetheless, Swiggy remains closely aligned with its rival, Zomato, in terms of valuation. In July, Zomato’s market capitalization was approximately $7.7 billion on the BSE. Nevertheless, the publicly-traded foodtech leader has experienced a 30% surge in its valuation since that time.
Zomato’s market capitalization currently stands at INR 98,004 crore, equivalent to $11.7 billion on the BSE, surpassing Swiggy’s highest valuation of $10.7 billion.
The most recent development follows almost two months after the U.S.-based asset management firm Baron Capital Group raised Swiggy’s valuation by 33.9% quarter-on-quarter (QoQ) to reach $8.54 billion as of June 2023.
The sense of reassurance follows months of reductions in valuation for Indian startups by international investment firms, including Prosus and Neuberger Berman. These favorable developments primarily stem from enhanced financial metrics and a relaxation of macroeconomic challenges, resulting in positive outcomes for the foodtech major.
In the wake of a funding downturn that adversely affected the startup ecosystem, domestic companies have transitioned to emphasize sustainable and profitable expansion while reducing costs. This shift has led to an industry-wide optimization effort, which has included substantial employee layoffs.
Following extensive deliberation, earlier this year, Swiggy’s CEO, Sriharsha Majety, announced that the company’s food delivery business had achieved profitability (excluding ESOP costs) as of March 2023.
Curiously, Swiggy disclosed a combined loss of INR 3,629 crore in the fiscal year 2022, despite generating INR 5,704.9 crore in revenue.
At the same time, there are reports that the company is contemplating a potential public listing in 2024, engaging in talks with financial institutions to assess its valuation. To enhance its profitability and increase its overall revenue, Swiggy has also recently raised its platform fee from INR 2 to INR 3 per order.
