In runup to Swiggy’s IPO, Baron marks up food-delivery firm’s valuation to $15.1 bn

Swiggy’s fair valuation has been marked up to $15.1 billion by top investor Baron Capital as of 31 March, underscoring the food and grocery delivery platform’s growth potential ahead of its public-market listing.

This marks a 24% jump in valuation from Baron’s previous disclosure, as per filings with the US Securities and Exchange Commission. The New York-based asset management firm, which was one of Swiggy’s earliest investors, had valued the share of its holdings in the Indian company at $12.2 billion last year.

In April, another top US-based investor, Invesco, lifted its valuation of Swiggy by nearly 20% to $12.7 billion. Invesco had cut Swiggy’s valuation twice in 2023 before lifting its estimate of the company’s worth twice this year.

Despite the markups, Swiggy faces significant challenges in a slowing market, where increasingly price-conscious customers complicate growth. 

These difficulties are compounded in a fiercely competitive landscape, where rival Zomato is also striving to expand its user base, minimize cash burn, and achieve positive unit economics. Additionally, the company has also seen senior-level management exits in the past year.

IPO concerns

The Sriharsha Majety-led Swiggy is gearing up for an IPO later this year, aiming to raise about $1.25 billion, with a bulk of it coming from an offer-for-sale component, as per filings made with the Registrar of Companies.

Swiggy filed its draft IPO papers through the confidential route last month and appointed CitiGroup, Jefferies Group, Kotak Mahindra Capital, ICICI Securities, and Bank of America as investment bankers to the issue.

While India’s stock market is booming, domestic and foreign investors have become more cautious about IPOs by Indian startups amid concerns of unrealistically high valuations of companies still making losses.

Swiggy last raised about $700 million in January 2022 at a $10.7-billion valuation, in a funding round led by Invesco and Dutch investor Prosus Ventures.

Also read | Zomato steers ahead in food delivery race. Is Swiggy far behind?

In 2022-23, Swiggy’s operating revenue grew about 45% to ₹8,264 crore, while its losses widened by 15% to ₹4,179 crore, as per its latest-available financials. The company hasn’t reported its financials for 2023-24 yet.

Founded in 2014 by Majety, Nandan Reddy and Rahul Jaimini, Swiggy has so far raised over $3.5 billion from several investors, including SoftBank, GIC, and QIA.