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
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.
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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.