Invesco marks up IPO-bound Swiggy's valuation by 19% to $12.7 billion

A series of mark-ups push the company's valuation closer to its rival Zomato

US-based fund manager Invesco has marked up the valuation of IPO-bound food delivery major Swiggy for the third consecutive time to $12.7 billion, a 19 per cent increase from what the company was valued at during its last fundraising, according to regulatory filings.

The Bengaluru-based startup raised a massive $700 million funding round led by Invesco in January 2022, which made Swiggy a decacorn, valued at $10.7 billion.

After facing a spate of valuation cuts early last year due to high cash burn and poor margins, Swiggy has been on a path of financial recovery as it gears up for a $1 billion (Rs 8,300 crore) initial public offering (IPO) likely later this year. As such, its investors have been consecutively marking up Swiggy's valuation over the last year.

Invesco, in October last year, marked up Swiggy's valuation to $7.85 billion. It subsequently marked up this figure to $8.3 billion in January this year, before now valuing the company at $12.7 billion.

Besides Invesco, US-headquartered asset management firm Baron Capital also marked up Swiggy's valuation to $8.54 billion in August last year. It again marked up Swiggy's valuation to $12.1 billion last month.

Swiggy did not comment on the development.

The recent mark-ups have brought Swiggy's valuation closer to that of its rival Zomato. The BSE-listed company has witnessed a surge in its share price, reaching a record high of Rs 193.7 per share as of April 9. This strong performance, driven primarily by its quick-commerce segment, has propelled Zomato's market capitalisation to over $20 billion.

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Investors usually take into account the valuations in the public market when assessing private market companies, and Swiggy is no different.

Since the beginning of 2023, Swiggy has undergone retrenchments by way of layoffs and shutting many of its business verticals. The firm also introduced a Rs 2 platform fee for all its users, after which it hiked this fee to Rs 10. This led to its food delivery business turning profitable in the March quarter of FY23 (Q4 FY23) after considering corporate costs and excluding employee stock options (ESOP). 

According to filings from Swiggy’s largest investor Prosus, Swiggy’s core food delivery business grew 17 per cent to deliver a gross merchandise value (GMV) of $1.43 billion in the first half (H1) of the financial year 2023-24 (FY24). This was less than that of Zomato, which reported a GMV of around $1.84 billion during the same period.

Meanwhile, its trading loss in the food delivery platform reduced to $208 million in the first half of FY24, compared to $321 million in the corresponding period a year ago.