Invesco Cuts Swiggy’s Valuation Once Again, Marks Down To $5.5 Bn

Atlanta-based investment firm Invesco has cut the valuation of foodtech startup Swiggy once again, valuing it at $5.5 Bn as against $10.7 Bn in January last year, according to regulatory filings.

The move comes amid sinking valuations of top Indian startups as investors continue to take a cautious approach towards them. 

Invesco valued Swiggy at $10.7 Bn when it led its $700 Mn funding round in January 2022. However, the investment firm marked down the foodtech giant’s valuation to $8 Bn in October 2022, valuing its shares at $4,759 each. 

Previously, the investment firm had marked down value of its share in the company to $8 Bn.

Now, as per Invesco’s filings as of January 31, 2023, the investment firm holds 28,844 shares of Swiggy at a value of $3,305.7 apiece. This brings Swiggy’s valuation to around $5.5 Bn.

The latest cut represents a decline of 50% from the $10.7 Bn valuation Invesco had attached to Swiggy during the funding round.

Incidentally, the valuation cut brings Swiggy’s valuation to a level similar to that of its primary rival Zomato. The listed foodtech closed Monday’s (May 8) trading session at a market cap of around $5.45 Bn. 

The valuation cut comes at a time when the global economic slowdown has resulted in sharp erosion in the valuation of tech companies globally. This has also resulted in many major Indian startups seeing valuation markdowns in recent months. 

BlackRock recently cut the valuation of BYJU’S by nearly half to $11.5 Bn, along with Softbank cutting IPO-bound OYO’s valuation by 20% last year.

However, Swiggy has been unable to hold onto the ground in the market, as analysts suggest that Zomato has captured nearly 55% of India’s food delivery market. Even while offering deeper discounts, the Prosus and Softbank-backed foodtech startup has struggled to keep up with its publicly traded counterpart.

Swiggy has, therefore, been diversifying into other verticals like grocery. The foodtech startup recently launched Maxx, a platform that would deliver products such as toys, electronics, gadgets, and home and kitchen essentials in under one hour.

Swiggy also plans to add categories such as beauty and grooming, essential clothing, gardening, furnishing and decor, and health and fitness soon, taking on the likes of Amazon and Flipkart in the process.

Recently, Swiggy has been busy jettisoning non-viable business verticals. For instance, it shut down Handpicked, a premium grocery vertical, months after launching its pilot in Bengaluru. It sold its kitchen infra business, Access, to Kitchens@ in March and shut down private label The Bowl Company in Delhi NCR late last year. 

On top of all this, it fired 380 employees at the start of this year citing restructuring. In FY22, Swiggy posted a loss of INR 3,628.9 Cr, 2.2X higher than INR 1,616.9 Cr in FY21, as its expenses shot up 2.3X to INR 9,574.5 Cr.

The development was first reported by TechCrunch.