Swiggy's Valuation Takes a Hit as Invesco Slashes Stake Value
Investor Invesco slashes Swiggy's valuation to $8bn, adding to the trend of Indian start-ups facing setbacks
1 April 2023
|
Kunal Tyagi
The value of Swiggy has decreased from $10.7 billion to $8 billion as a result of Invesco selling a portion of its ownership.
The food delivery platform lost INR 3,628.9 crore ($488m) in FY22, while its operating income increased by more than double to INR 5,704.9 crore.
Swiggy is one of several Indian digital start-ups whose values have been reduced due to worries about increasing losses and significant capital burn.
After selling a portion of its stock in the Indian food delivery service Swiggy, US-based investment firm Invesco reduced the company's valuation from $10.7 billion to $8 billion. After receiving $700 million from Invesco in January 2022, the company's valuation increased to $10.7 billion. Yet according to records, Invesco cut the value of its interests in October 2022, bringing Swiggy's worth down to $8 billion. As operational revenue more than quadrupled to INR 5,704.9 crore, the company's losses increased to INR 3,628.9 crore ($488m) in FY22.
In 2014, Swiggy launched as a platform for food delivery. In 2020, it expanded into other industries and bought the restaurant-finding app Dineout. Yet, it slashed 380 workers and shut down its meat market earlier this year. Swiggy co-founder Sriharsha Majety attributed the changes to slower-than-anticipated growth in food delivery in an email.
Apply to Xartup Fellowship Program
Get ₹1.5 Crore Technical Funding
Swiggy's valuation reduction fits into a trend in the Indian startup environment; according to a story from The Arc, investor Blackrock lowered Byju's valuation in half. Byju's worth was estimated by Prosus at $6 billion in November 2022, down from $22 billion in its most recent fundraising round. SoftBank allegedly reduced Oyo's valuation from $10 billion to $2.7 billion last year.
One of several Indian digital start-ups whose valuations have been reduced by investors due to lagging global cues and uncertain market conditions is Swiggy. SoftBank reduced the valuation of portfolio start-up Oyo from $10 billion to $2.7 billion last year. Concerns have been expressed over increasing losses and high cash burn, similar to Swiggy. More than doubling its losses from FY21, the food delivery service registered a net loss of INR 3,628.9 crore in FY22.
Karthik Gurumurthy, the CEO of Instamart, left his position and left Swiggy recently due to a vacation. Phani Kishan Addepalli, the co-founder of Swiggy, received the helm from Gurumurthy. The business has had some success in other ventures, with Prosus projecting a 40% increase in Swiggy's food delivery GMV to $1.3 billion in the six months leading up to 30 September 2022. Swiggy's valuation reduction indicates that the company's objective of profitability is still some distance off.
Startup news delivered to your mail
Recommended for you
Budget 2023: Did it Live up to the Startup Ecosystem's Hopes?
Byju’s, Once Valued at $22 Billion, Faces Insolvency Proceedings
Budget 2024: FM Nirmala Sitharaman Abolishes Angel Tax to Boost Startups