 "Baron Capital boosts food delivery firm Swiggy valuation to $15.1 billion")
A fund managed by US-based asset management firm Baron Capital Group has increased the valuation of food delivery firm Swiggy to $15.1 billion. This is 25 per cent higher than the last fair value recorded by the investor, according to regulatory filings with the US Securities and Exchange Commission (SEC). The Bengaluru-based firm has filed draft papers for an initial public offering (IPO).
The latest valuation reflects the value of Swiggy as of March 31. As of December 31, 2023, Baron Capital valued Swiggy at $12.1 billion.
Baron had participated in the $700-million funding round of the firm in January 2022.
After facing a spate of valuation cuts early last year due to high cash burn and poor margins, Swiggy has been on a path of financial recovery as it gears up for a $1 billion (Rs 8,300 crore) initial public offering (IPO) likely later this year. As such, its investors have been consecutively marking up Swiggy's valuation over the last year.
US-based fund manager Invesco also recently marked up the valuation of Swiggy for the third consecutive time to $12.7 billion, a 19 per cent increase from what the company was valued at during its last fundraising, according to regulatory filings.
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Last year, Invesco, which led Swiggy’s previous funding round, marked down the food delivery giant’s valuation by 33 per cent from $8.2 billion to about $5.5 billion. After this, Invesco also marked up the valuation of Swiggy to $7.85 billion after slashing it twice in four months in 2023. In January 2022, Swiggy raised $700 million in Invesco-led funding, which made the outfit a decacorn, almost doubling its valuation to $10.7 billion.
The new valuation of $15.1 billion by Baron is above the $11 billion IPO valuation target that Swiggy was eyeing. The firm plans to raise an estimated $1 billion (Rs 8,300 crore) through the IPO this year. The company is targeting a valuation in the range of $10-11 billion, and it currently has approximately $800 million in cash from the previous funding round, according to sources.
Swiggy filed its draft IPO papers through the confidential route last month, according to sources.
Swiggy did not comment on the development.
The recent mark-ups have brought Swiggy's valuation closer to that of its rival Zomato. As of June 2024, BSE-listed Zomato has a market cap of $18.65 billion. Its strong performance has been driven by the quick-commerce segment. It recently hit a market cap of $21 billion.
Swiggy has been intensifying efforts to achieve profitability as it prepares for the IPO.
Swiggy recorded Rs 5,476 crore in revenue from operations and Rs 1,600 crore loss during the first three quarters of the financial year FY24, according to Entrackr. In FY23, the company saw a 45 per cent increase in revenue, reaching Rs 8,625 crore. However, the net loss expanded to Rs 4,179 crore.
Swiggy’s largest expense in FY23 was purchases of stock in trade, rising by 48 per cent to Rs 3,302 crore. Employee benefits costs also climbed 25 per cent to Rs 2,130 crore. Dineout, Swiggy’s restaurant technology platform acquired in 2022, contributed Rs 77.5 crore to revenue and incurred an operating loss of Rs 176 crore during the financial year.
Besides Swiggy, Pine Labs, Meesho, FirstCry, and Ola Electric also saw mark-ups in their valuation in the last six months.