SUMMARY
Baron Capital increased Swiggy’s valuation by 33.9% QoQ to $8.54 Bn at the end of June 2023, while it marked up the valuation of Pine Labs 10% QoQ to $4.92 Bn
The investment firm slashed the valuation of BYJU’S by 44.6% to $11.7 Bn at the end of June 2023 from $21.2 Bn in March 2023
Baron Capital noted that Indian equities returned to leadership after two consecutive quarters of underperformance and valuation reset
After a wave of valuation markdowns, US-based asset management company Baron Capital Group has marked up the valuation of portfolio startups foodtech giant Swiggy and fintech major Pine Labs as of June 2023.
In its quarterly report, Baron Capital internally increased Swiggy’s valuation by 33.9% quarter-on-quarter (QoQ) to $8.54 Bn. On the other hand, it also marked up the valuation of Pine Labs by 10% QoQ to $4.92 Bn.
However, the investment firm trimmed the valuation of BYJU’S by nearly half. It slashed the valuation of the edtech decacorn by 44.6% to $11.7 Bn at the end of June 2023 from $21.2 Bn at the end of March 2023.
The increase in valuation is a major reversal of sorts, especially for Swiggy and Pine Labs, as both suffered valuation markdowns by Baron Capital in the quarter ended March 2023. While the firm had cut the foodtech major’s valuation by 10%, it slashed the fintech player’s value by 5% on a quarterly basis at the end of March this year.
Baron Capital also highlighted that Indian equities returned to leadership after two consecutive quarters of underperformance and valuation reset. It added that economic and earning expansion in the country continued on a healthy course.
“This reversal was the principal driver of our second quarter outperformance and we maintain conviction that India likely offers the most attractive long-term investment opportunity in the EM (emerging markets)/Asia universe,” the asset management company added.
This comes after months of valuation cuts of Indian startups by global investment firms from Prosus to Neuberger Berman.
Amid raging funding winter and mounting losses of Indian unicorns, the focus, at the beginning of the year, shifted to profitability and sustainability. As clamour grew for streamlining operations and focussing on healthy numbers, Indian startups undertook drastic measures in their push for profitability, including layoffs and shutting down cash-guzzling businesses.
As a result, profitability has emerged as a buzzword in the Indian startup ecosystem, with many companies putting out claims of having turned profitable. On the other hand, BYJU’S has been marred by legal challenges as well as a debt crisis.
