Baron Capital Marks Up Swiggy’s Valuation To $12.16 Bn

SUMMARY

Baron Capital increased the fair value of its stake in Swiggy to $87.2 Mn from its original investment of $76.7 Mn

Swiggy was valued at $10.7 Bn during its last $700 Mn fundraise in 2022, led by Invesco

The development comes at a time when the foodtech giant is preparing for a mega IPO, with an expected issue size of $1 Bn, in 2024

US-based asset management firm Baron Capital Group has increased the fair value of its stake in IPO-bound food delivery major Swiggy, resulting in an over 13% increase in the startup’s valuation to $12.16 Bn from its valuation of $10.7 Bn during the last fundraise in 2022.

As per Baron Capital’s annual financial report for the year ending December 31, 2023, the firm increased the fair value of its stake in Swiggy to $87.2 Mn, up almost 14% from its original investment of $76.7 Mn.

The development comes at a time when Swiggy is preparing for a mega IPO, with an expected issue size of $1 Bn, in 2024. We must note that last year, Baron Capital marked down Swiggy’s fair value by 34% to $7.3 Bn as of December 31, 2022.

In a separate filing, Baron Capital noted that Swiggy has roughly 45% market share in the food delivery industry. The startup is well positioned to benefit from structural growth in online food delivery in India, the investor believes.

“We believe India’s food delivery industry is still in its infancy and will continue to scale over the next several years thanks to a growing middle class, rising disposable income, higher smartphone penetration, and structural shifts in consumer preferences driven by a tech-savvy, younger population,” it said.

Founded in 2014 by Sriharsha Majety, Nandan Reddy, Phani Kishan Addepalli, and Rahul Jaimini, Swiggy competes with Zomato in the Indian food delivery market, which is largely a duopoly. Swiggy has raised a total funding of about $3.6 Bn till date.

In 2022, Swiggy raised $700 Mn in its Series K round led by Invesco. The round doubled its valuation to $10.7 Bn.

In the quarter ended September 2023, Invesco marked up Swiggy’s valuation to $7.85 Bn, while Baron Capital last valued the startup at $8.54 Bn.

Swiggy’s net loss rose 15% year-on-year to INR 4,179.3 Cr in FY23, while operating revenue jumped over 40% to INR 8,264.4 Cr. Last year, the startup claimed that it achieved profitability in its food delivery business as of March 2023.

Inc42 recently reported that Swiggy is on track to report over 20% YoY rise in its revenue in FY24.