Invesco, a prominent US-based fund manager, has revisited the valuation of Swiggy, the food and grocery delivery platform, raising it to nearly $8 billion. This move comes after two previous valuation cuts in the past four months. In July, Invesco increased Swiggy’s valuation to $7.85 billion from $5.5 billion in April, marking a 42% rise. However, the current valuation is still 30% lower than the $10.7 billion valuation in January 2022 when Invesco led a $700 million fund raise.
In assessing startup/private investments, Invesco takes into account the valuations of peers. With this latest increase, Swiggy’s valuation is now closer to rival Zomato, which was valued at around $7.7 billion as of July. Notably, Swiggy has exhibited higher volume growth than Zomato, recording 7% month-on-month growth in July and 6% in August, outpacing its competitor in both months.
A report by brokerage firm UBS Securities highlighted the food delivery space in India growing at 10% sequentially in July-September. The report also noted a modest spike in discounts from Swiggy, up around 120 basis points over July and August, and a reduction in delivery fees, down around 70 basis points over the same period. This strategic response may be attributed to market share losses in the preceding six months.
This isn’t the first time Swiggy’s valuation has been adjusted. In August, Baron Capital Group increased the valuation by 33.9% quarter-on-quarter to $8.54 billion as of June 2023. Swiggy’s losses surged by 80% in the 2022-23 financial year, reaching $545 million, as reported by Dutch investor Prosus. Despite the losses, Swiggy focused on reactivating users, increasing monthly frequency, and improving user conversion, resulting in a rise in Prosus’ share of revenue to $297 million in FY23.
These valuation adjustments suggest a dynamic market landscape and the ongoing competition between food delivery platforms in India.
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