After two cuts, Atlanta-based investment firm Invesco has marked up the valuation of Indian foodtech startup Swiggy by more than 42% to $7.85 Bn at the end of July.
The new information was part of financial disclosures made by the investor recently. Invesco last maintained the valuation of the Bengaluru-based startup at $5.5 Bn at the end of April 2023.
The Atlanta-based firm currently holds 24,844 shares in Swiggy with a cumulative value of $135.6 Mn, which pegs each share at a value of $4,703.
This is the first major boost for the foodtech major since two consecutive markdowns by the investor. Invesco first acquired a stake in the company in January 2022, when it led a $700 Mn funding round at a valuation of $10.7 Bn.
The Atlanta-based firm cut the valuation of the company on its books to $8 Bn in September 2022, and then cut it further to $5.5 Bn at the end of April 2023.
However, Swiggy continues to walk neck to neck with its competitor Zomato when it comes to valuation. As of July, Zomato’s market cap stood at around $7.7 Bn on the BSE. However, the listed foodtech major has seen a 30% jump in its valuation since then.
Zomato’s market capitalisation currently stands at INR 98,004 Cr ($11.7 Bn) on the BSE, ahead of Swiggy’s peak valuation of $10.7 Bn.
The latest development comes nearly two months after US-based asset management company Baron Capital Group increased the valuation of Swiggy by 33.9% quarter-on-quarter (QoQ) to $8.54 Bn as of June 2023.
The sigh of relief comes after months of valuation markdowns of Indian startups by global investment firms ranging from Prosus to Neuberger Berman. The positive developments are largely the result of improvements in financial metrics and easing macroeconomic pressures that have yielded positive results for the foodtech major.
After the funding winter wreaked havoc across the startup ecosystem, the homegrown players have shifted gears to prioritise sustainable and profitable growth while cutting down on expenses. This has resulted in a pan-industry streamlining exercise, including thousands of employee layoffs.
After much back and forth, Swiggy CEO Sriharsha Majety, earlier this year, claimed that the company’s food delivery business achieved profitability (without factoring ESOP costs) as of March 2023.
Interestingly, Swiggy reported a consolidated loss of INR 3,629 Cr in FY22 on a revenue of INR 5,704.9 Cr.
Meanwhile, the company is reportedly mulling a public listing in 2024 and is holding discussions with bankers to evaluate its valuation. In bid to further bolster profitable numbers and pad up its topline, Swiggy recently also hiked the platform fee from INR 2 to INR 3 per order.
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