Swiggy’s Pre-IPO Valuation Hits $12.1B , What’s Next?

As Swiggy, the Indian food delivery giant, approaches its much-anticipated Initial Public Offering (IPO), its valuation has surged to an impressive $12.1 billion. This reflects the company's robust growth trajectory in its future prospects. With its IPO on the horizon, Swiggy's soaring valuation underscores its position as a key player in the online food delivery market of India.

How has Swiggy’s business journey unfolded in the last 10 years?

The success of Swiggy can be attributed to its excellent logistics operations which allowed the food-tech startup to emerge as a unicorn with its latest valuation, by taking control of its delivery fleets.

To put into perspective, when Swiggy was launched in 2014, the competitors Zomato and Foodpanda were outsourcing deliveries to either restaurants or third-party logistics providers; while Swiggy was investing in building the technologies that made its logistic networks more efficient and placing focus on one key metric—customer experience that earned them high customer retention since its inception.

Timeline of Swiggy’s valuation reaching $12.1 Billion

In 2016, Swiggy secured almost $15 million from investors like Bessemer Venture. In 2017, it raised $80 million from Naspers, and in 2021, an additional $450 million from SoftBank. By 2022, Swiggy had gathered $700 million in funding led by Invesco and Baron Capital.

Apart from that, Swiggy has raised funds from several big names in the market such as Tencent, Goldman Sachs, Wellington, and more. In 2022-23, the company oversaw a 45% increase in revenue with $1.2 million (Rs. 8,265 crores) against a 35% decrease in the net loss worth nearly $500K (Rs. 4179 crores).

In the first half of 2023-24, Swiggy’s food delivery business grew by 17%, raising it’s valuation to $9.5 billion in October 2023. With a targeted valuation of $12.1 billion by the US-based asset manager and investor Barron Capital, the company has attained a 13% higher valuation than its previous valuation.

Where does Swiggy stand against competitors?

In December 2023, Swiggy’s direct competitor, Zomato’s market capitalisation stood at over $17 billion with a $13 billion valuation. The Baron Capital Group, one of the biggest investors in Swiggy, which also holds stakes of $11 million in Zomato; stated that India’s food delivery industry is still at its nascent stage and has the potential to scale further over the next several years.

The key factors behind the boom in India’s food delivery industry are the increasing disposable income of the middle class and the higher penetration of smartphones where the tech-savvy younger generation highly influences consumer preference. As Swiggy is positioned well to benefit from the expected growth in this industry, there is a high possibility India’s online food delivery industry could become a duopoly between Swiggy and Zomato; battling to capture the higher shares in the market.

Does the $ 12.1 billion valuation look fair?

Currently, Swiggy’s unlisted shares are traded in the grey market which is also known as pre-IPO stocks. Currently trading at Rs. 450 per share, Swiggy has built a solid online food delivery business foundation and is well-positioned for future expansion in this competitive industry.

With a $1 billion IPO in the pipeline, Swiggy is expected to have an offer-for-sale of at least $600-800 million requiring some of its existing investors to offload some of their stakes.

Another investor, Prosus is also looking to dilute its shareholding in Swiggy before IPO. As a result, discussion surrounding Swiggy’s valuation is buzzing among financial analysts. Retail investors eagerly await the opportunity to assess Swiggy’s market performance upon its IPO launch on NSE and BSE.

How does the future hold?

As the company is gearing up for its IPO launch, Swiggy has employed several strategies to sustain its growth trajectory and valuation starting with focusing on major domestic and global expansion. Attractive markets include countries like the UAE, where Zomato used to operate in partnership with Talabat until 2022. The company needs to cut costs and focus on customer retention and acquisition. With the focus on capturing the global food delivery market, immense opportunities underlie Swiggy. To ensure the success of its IPO, Swiggy needs to exemplify its customer-first strategy along with its agile technological edge to stay ahead of the competition.

Invest in Swiggy before the IPO for more gains.

You can invest in Swiggy before its IPO and seize the market gap. With Swiggys’s market dominance and huge growth potential, investing today can get you a better valuation. Explore Stockify to access Pre-IPO Swiggy’s shares and take your right call.