Baron Capital, an investor in Indian food delivery startup Swiggy, has increased the value of its stake in the Indian company, implying a valuation of $12.16 billion, surpassing the post-money valuation of $10.7 billion at which Swiggy secured funding in its early 2022.
New York-based Baron Capital disclosed in new fillings (PDF) that it has valued its stake in Bengaluru-based Swiggy at $87.2 million, up from its initial $76.7 million investment in the food delivery platform.
The valuation hike at the end of December is a remarkable development for Swiggy and, more generally, India’s startup ecosystem. This is especially significant given that Swiggy’s valuation was previously down to $5.5 billion.
Swiggy has around 45% market share in India’s food delivery sector and is “well positioned to benefit from the structural growth in e-food delivery in India”, Baron Capital He wrote (PDF) in a separate file.
We add: “We believe India’s food delivery industry is still in its infancy and will continue to scale in the coming years thanks to a growing middle class, rising disposable income, higher smartphone penetration and structural changes in consumer preferences driven by a technology smart, younger population. The industry has also become a duopoly between Swiggy and Zomato, which bodes well for the company’s future profitability and scale.”
Swiggy reported last year that it had covered its expenses and that its food delivery business had become profitable, a feat it has maintained ever since. The startup plans to file for an IPO later this year.
Shares of Zomato, Swiggy’s main competitor, have risen over the past six months as the Gurgaon-based company improves its financials. Zomato had a market capitalization of around $17 billion.
Swiggy, which is also a major player in the instant grocery delivery space in India, is increasingly expanding its offerings. Swiggy — which counts Prosus Ventures, Accel and SoftBank among its backers — is expanding into consumer electronics and other categories, targeting a larger share of the e-commerce market, offering 20-minute delivery for all purchases.
Meanwhile, Walmart-backed Flipkart, which leads e-commerce in India, plans to enter the drop-shipping space, TechCrunch reported on Thursday.
