US-based Baron Capital boosts Swiggy's valuation to $12.1 billion

New valuation is above the $11 billion IPO valuation target that Swiggy is eyeing

A fund managed by US-based asset management firm Baron Capital Group has increased the value of its stake in food delivery giant Swiggy to $12.1 billion. This is 13 per cent higher than the $10.7 billion valuation at which the Bengaluru-based firm last raised funds in 2022.

Baron Capital has now reportedly marked up the fair value of its holding in Swiggy for the third consecutive time. It had participated in the $700-million funding round of the firm in January 2022. This latest valuation, disclosed in filings with the US Securities and Exchange Commission, reflects the value of Swiggy as of December 31, 2023.

It has marked up the value of its stake in Swiggy to $87.2 million from its original investment of $76.7 million in the firm.

Last year, US investment firm Invesco, which led Swiggy’s previous funding round, marked down the food delivery giant’s valuation by 33 per cent from $8.2 billion to about $5.5 billion. After this, Invesco also marked up the valuation of Swiggy to $7.85 billion after slashing it twice in four months in 2023. In January 2022, Swiggy raised $700 million in Invesco-led funding, which made the outfit a decacorn, almost doubling its valuation to $10.7 billion.

The new valuation by Baron is above the $11 billion IPO (initial public offering) valuation target that Swiggy is eyeing. It is planning to file its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) for its IPO soon.

The firm plans to raise an estimated $1 billion (Rs 8,300 crore) through the IPO this year. The company is targeting a valuation in the range of $10-11 billion, and it currently has approximately $800 million in cash from the previous funding round, according to sources.

The food delivery giant has been intensifying efforts to achieve profitability as it prepares for the IPO. In FY23, the company saw a 45 per cent increase in revenue, reaching Rs 8,625 crore. However, the net loss expanded to Rs 4,179 crore.

Swiggy’s largest expense in FY23 was purchases of stock in trade, rising by 48 per cent to Rs 3,302 crore. Employee benefits costs also climbed 25 per cent to Rs 2,130 crore. Dineout, Swiggy’s restaurant technology platform acquired in 2022, contributed Rs 77.5 crore to revenue and incurred an operating loss of Rs 176 crore during the financial year.