Invesco, an Atlanta-based investment firm, recently raised the valuation of Indian foodtech startup Swiggy by over 42 per cent to USD 7.85 billion by the end of July. This marks a significant boost for Swiggy, as the company had experienced two consecutive markdowns prior to this.
Previously valued at USD 5.5 billion in April 2023, Swiggy’s new valuation comes as a positive development. Invesco currently holds 24,844 shares in the Bengaluru-born startup, with a total value of USD 135.6 million, translating to a per-share value of USD 4,703.
Swiggy’s valuation puts it in close competition with its rival Zomato, which currently holds a market cap of around USD 7.7 billion on the BSE. However, Zomato has witnessed a 30 per cent increase in valuation since July.
This positive shift in valuation for Swiggy follows after Baron Capital Group, a US-based asset management company, increased the startup’s valuation by 33.9 per cent quarter-on-quarter to USD 8.54 billion in June 2023.
Indian startups have faced valuation markdowns by global investment firms in recent times. However, Swiggy’s upward trend is a result of improved financial metrics and a more favorable macroeconomic environment. The company has prioritized sustainable and profitable growth, leading to industry-wide streamlining and cost-cutting measures, including employee layoffs.
Swiggy’s CEO, Sriharsha Majety, claimed earlier this year that the company’s food delivery business achieved profitability, excluding ESOP costs, as of March 2023. In FY22, Swiggy reported a consolidated loss of Rs 3,629 crore (USD 487 million) on a revenue of Rs 5,704.9 crore (Rs 766 million).
Looking ahead, Swiggy is reportedly considering a public listing in 2024 and is engaging in discussions with bankers to assess its valuation. To further bolster profitability, the company recently increased its platform fee from Rs 2 to Rs 3 per order.
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