Swiggy: US investor Invesco raises fair value of Swiggy, reduces valuation of Pine Labs

A fund managed by US-based investor Invesco increased the fair value of public markets-bound online food delivery company Swiggy in its books to $13.3 billion as of July 31, according to a regulatory filing made with the US Securities and Exchange Commission. At the same time, the investor reduced the valuation of fintech firm Pine Labs to $3.3 billion.

The valuation ascribed to Swiggy by Invesco was 24% higher than the $10.7 billion value at which the asset management firm invested in the company in January 2022. As of April 30, Invesco valued Swiggy at $12.7 billion.

Invesco is not participating in the offer for sale (OFS) component of Swiggy’s upcoming initial public offering (IPO). The Bengaluru-based company has filed an updated red herring prospectus for its public issue through which it is looking to raise Rs 3,750 crore in fresh capital and OFS of up to 185.3 million shares.

Crossover funds, which invest both in publicly traded and privately held companies, periodically review the valuation of their portfolio companies. The fair value is ascertained on the basis of a number of factors, including the stock market performance of comparable peers.

Swiggy’s listed rival Zomato has been witnessing an upswing in its market capitalisation, which has nearly tripled in the past one year to $30 billion.

On July 31 – for when Invesco marked Swiggy’s valuation at $13.3 billion – Zomato’s market capitalisation was $24.1 billion.

According to stock market analysts, the surge in Zomato’s market capitalisation has been on the back of growth in its quick commerce business Blinkit, which rivals Swiggy’s Instamart, in addition to Nexus Venture Partners-backed Zepto and Tata Digital-owned BigBasket.

In a September 3 research note, brokerage firm CLSA said that Blinkit had a 39% market share in the quick commerce segment, followed by Zepto and Instamart at 28% each. BigBasket’s BB Now and latest entrant Flipkart Minutes together had 6% share in India’s 10-minute delivery market.

In terms of financial metrics, too, Swiggy has trailed Zomato across their mainstay food delivery segment and quick commerce, ET reported on September 27.

For the current financial year, Swiggy Instamart has a gross order value (GOV) run rate of $1.3 billion, compared to Blinkit’s run rate of more than $2 billion and Zepto’s $1.5 billion.

In the food delivery segment – the largest revenue-generating vertical for both companies – Swiggy lags behind Zomato, with the IPO-bound company posting Rs 6,808 crore in GOV. Its listed rival clocked Rs 9,264 crore in GOV from food delivery during the April-June period.

Online publication TechCrunch was the first to report on Invesco’s valuation revision of Swiggy.

Pine Labs

Invesco reduced Pine Labs’s valuation for the third consecutive quarter, down to $3.3 billion as of July 31 from $3.5 billion as of April 30, $3.8 billion as of January 31 and $4.8 billion as of December 31, 2023.

The payments company, which mainly deploys point-of-sales solutions at offline merchant outlets, had last raised $150 million from Alpha Wave in 2022. After the fundraising, it was valued at $5 billion.

Invesco currently owns about 2.8% of Pine Labs, while Baron Capital holds around 1.3%. Peak XV Partners, the original investor in the company, now has around 20.6%, data sourced from Tracxn showed.

The company is in the process of shifting its domicile to India from Singapore, having received court approval in May to merge its entity in the city-state with the domestic one. It is seeking necessary clearances from the National Company Law Tribunal in this regard.

ET first reported on March 20 on Pine Labs’ filings in India and Singapore for a reverse merger.