US-based fund manager Invesco marks up Swiggy's valuation to $8.3 billion

US-based fund manager Invesco has marked up the valuation of initial public offering (IPO)-bound Swiggy to $8.3 billion as on October 31, 2023, according to its regulatory filing.

Invesco’s 28,844 shares (around 2 per cent stake according to market intelligence firm Tracxn) in the Bengaluru-based food delivery major were valued at $147.63 million at the end of October. This translates into an overall valuation of $8.3 billion. The fund manager’s earlier mark-up of its shares in October, after back-to-back cuts, had valued Swiggy at $7.85 billion.

Swiggy’s latest valuation mark-up comes close on the heels of its Gurugram-based rival Zomato reporting a second straight quarter of consolidated profits — Rs 36 crore in the July-September quarter of 2023-24, after Rs 2 crore in the previous quarter.

Swiggy had become a decacorn, with a valuation of $10.7 billion, when it raised $700 million in January 2022 in a funding round led by Invesco. However, amid a slowdown in India’s food delivery market and the company’s high cash burn, Invesco slashed its valuation to $8 billion in April last year, and further to $5.5 billion the next month.

Swiggy has since improved its financial health before its $1 billion (Rs 8,300 crore) IPO. Since the start of 2023, it has effected layoffs and shut many business verticals. It also introduced a Rs 2 platform fee for all users, which it later raised to Rs 3. These steps helped its food delivery business turn profitable (after considering corporate costs and excluding employee stock ownership plans) in the January-March quarter of 2022-23. Its monthly cash burn also reportedly came down to $20 million from $45-50 million during its peak in 2021.

According to filings by its 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 April-September period (H1) of 2023-24. This was less than Zomato’s $1.84 billion during the same period. Swiggy’s trading loss in the food delivery platform reduced to $208 million in H1, compared with $321 million in the year-ago period.

Besides Invesco, US-headquartered asset management firm Baron Capital had also marked up the value of its stake in Swiggy to $8.54 billion in August last year.