The US-based fund manager Invesco, who had twice reduced Swiggy’s valuation in the previous four months, has now increased the platform’s fair value.
According to papers, Invesco, which led Swiggy’s $700 million round in January of last year, valued the Bengaluru-based company as of July 31, 2023, at $7.85 billion, up from $5.5 billion.
The startup’s worth is still 30% less than what it was in January 2022, despite the recent action being a 42 percent gain from Swiggy’s last appraisal by Invesco.
Given that the food delivery business was seeing growth, when Invesco led the $700 million fund raise in Swiggy in January of last year, it valued the food technology giant at an astounding $10.7 billion. Since then, Swiggy, Zomato, and a few other major competitors have acknowledged that the market has lost speed and is expanding more slowly than anticipated.
Swiggy’s assessment of $7.85 billion, which increased its fair worth, brought it closer to rival Zomato’s $7.7 billion valuation as of July. However, since then, due to an improvement in financial health, its share price has increased by over 30% and is currently valued at over $11 billion.
Even Swiggy’s price could rise as it becomes more efficient because private company valuations follow those of its publicly traded peers.
Even Swiggy, which aims to go public in 2024, has been making efforts to strengthen its financial position. To put itself on a path toward profitability, it started adding a platform fee to all food orders, starting at Rs 2.
Inquiries were not immediately answered by Swiggy. The valuation change was initially reported by Techcrunch.
It has happened before that Swiggy’s valuation has been inflated. Baron Capital, a US-based asset management business (AMC), increased Swiggy’s fair value by 34% in August, essentially valuing the company at $8.5 billion.
Each of the 24,844 shares Invcesco has in Swiggy was valued at $7,666 in January 2022. When Invesco estimated Swiggy’s value at $5.5 billion in January of this year, the share price dropped to $3,306. Swiggy’s shares are worth $4,703 each as of July 31.
The corporation said, however, that the markups or reductions in worth didn’t worry it.
“We put a lot of emphasis on what customers want. We lose a lot of sleep worrying about them if something is not going well for them. These are pretty common fund reporting procedures that every company goes through, but one fund that is sitting in the US is marking up and marking down, over which we have no control, said Rohit Kapoor, CEO of the company’s food marketplace, in an interview with Moneycontrol.