Invesco, a US-based fund manager, which had slashed the valuation of Swiggy twice in four months, has finally pushed up the fair value of the food and grocery delivery platform.
As per filings, Invesco – which led Swiggy’s $700 million round in January last year – valued the Bengaluru-based company at $7.85 billion, an increase from $5.5 billion previously, as of July 31, 2023.
While the latest move represents a 42 percent increase from what Invesco had last valued Swiggy at, the startup’s valuation is still 30 percent lower than what it was in January 2022.
When Invesco led the $700 million fund raise in Swiggy in January last year, it valued the food tech giant at a staggering $10.7 billion given that the food delivery market was riding on a high. Since then Swiggy, along with Zomato and a few global players, has admitted that the market has lost steam and was growing slower than previously expected.
With the increase in fair value, Swiggy’s valuation of $7.85 billion was closer to rival Zomato, which was valued at around $7.7 billion as of July. Since then, it has however seen its share price zoom by over 30 percent, and is now valued at over $11 billion, thanks to an improvement in financial health.
Since the valuation of private companies moves in tandem with their listed peers, even Swiggy’s valuation could increase as it increases efficiency.
Even Swiggy, which is hoping for a 2024 IPO, has been taking measures to improve its financial health. It began levying a platform fee on all food orders and has been increasing the amount from Rs 2 to put itself on a path towards profitability.
Swiggy did not immediately respond to queries. Techcrunch was the first to report about the change in valuation.
This is not the first time Swiggy’s valuation has been marked up. In August, Baron Capital, a US-based asset management company (AMC), had marked up the fair value of Swiggy by 34 percent effectively valuing it at $8.5 billion.
Invcesco holds 24,844 shares in Swiggy and each share was worth $7,666 in January 2022. The share price reduced to $3,306 in January this year, when Invesco said Swiggy was worth $5.5 billion. As of July 31, Swiggy’s shares are worth $4,703 apiece.
The company however said it was not bothered by the valuation cuts or mark-ups.
“We are very focused on what consumers like. If something is not going right for them, we lose tremendous sleep over that. But one fund sitting in the US marking up and marking down, we have no control over - these are very standard fund reporting mechanisms which every company lives through,” CEO of the company’s food marketplace Rohit Kapoor had told Moneycontrol in an interview.
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