Invesco raises its valuation of Swiggy to $13.3B
Invesco has raised the value of its stake in Swiggy, ascribing an implied valuation of about $13.3 billion to the Indian food delivery startup.
U.S. asset manager Invesco has raised the value of its stake in Swiggy, ascribing an implied valuation of about $13.3 billion to the Indian food-delivery and quick-commerce startup that is on track to go public in about a month.
That’s a significant boost in Swiggy’s valuation, especially as they prepare for their public debut.
That happens a lot. It is often off also.
Invesco's Developing markets fund has recently disclosed its valuation of its 28,844 shares in Swiggy, a leading Indian food delivery company. As of the end of July 2024, the fund values its shares in Swiggy at a staggering $237.24 million, representing a significant markup from the $190.47 million it paid for the shares. This valuation is based on the fund's assessment of Swiggy's value, which is higher than the company's previous valuation of $10.7 billion in 2022.
Invesco initially invested in Swiggy in early 2022, leading a $700 million round that valued the company at $10.7 billion. However, when the market dipped in 2023, Invesco lowered its estimated value of Swiggy to $5.5 billion. As of April 2024, the fund valued Swiggy at around $12.3 billion. This significant increase in valuation is likely due to Swiggy's strong performance in the Indian food delivery market, as well as its growing presence in the country.
Firms use different methodologies to calculate the valuation of privately-held companies, and Invesco's valuation of Swiggy is based on the market performance of publicly listed rivals. Zomato, Swiggy's chief rival, has a market cap between $22 billion and $30 billion in recent months. Another investor, Baron, valued Swiggy at $15.1 billion as of the end of March 2024.
Baron believes that Swiggy is well-positioned to benefit from structural growth in online food delivery in India, driven by a growing middle class, rising disposable income, and higher smartphone penetration. The company's duopoly with Zomato also bodes well for its future profitability and scale. This growth potential is likely to drive up the value of Swiggy's shares, making it an attractive investment opportunity for many investors.
The markup in valuation comes at a time when many investors have cut the value of their holdings in several Indian and overseas startups. Invesco has cut the value of its holding in Pine Labs, a merchants payments startup, implying a valuation of $3.3 billion, down from the peak $5.5 billion. Other investors, such as 360 One, have also cut the value of their holdings in startups like VerSe, Licious, and upGrad.
Swiggy is currently seeking to raise as much as $1.4 billion in its initial public offering (IPO) at a valuation range of $13 billion to $15 billion. The company's IPO is expected to be one of the largest in India this year, and its valuation is likely to be closely watched by investors and analysts.
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How do you think Swiggy will continue to differentiate itself from Zomato, especially with such fierce competition in India’s food delivery market? And with the IPO coming up, could this be a pivotal moment for them to expand beyond food delivery into other areas of quick-commerce?