Swiggy valuation: Baron Capital marks Swiggy valuation at $12.1 billion, up 13% from last fundraise

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A fund managed by US-based asset manager Baron Capital Group has marked up the fair value of food-delivery platform Swiggy to $12.1 billion, 13% higher than the $10.7 billion valuation at which the Bengaluru-based firm last raised funds in 2022.

Baron Capital, which participated in the $700-million funding round in January 2022, has now marked up the fair value of its holding in Swiggy for the third consecutive time. The latest valuation was ascribed to Swiggy as of December 31, 2023, as per filings made with the US Securities and Exchange Commission.

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As of December 31, the asset manager’s fund held a stake worth $87.2 million in Swiggy’s parent company, up 17% from $74.4 million a quarter prior. The stake was worth $76.8 million at the time of acquisition.

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 material events with a company or the stock market performance of comparable peers.

Baron Capital Group, through two of its funds, also held stakes totalling to over $11 million in Swiggy’s chief rival Zomato, as of December 31.

Between September 30 and December 31, Gurugram-based Zomato’s share price rose 22%. On Friday, its market capitalisation stood at Rs 1.41 lakh crore (or over $17 billion).

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Baron Capital is not the only investor to have marked up Swiggy’s fair value in its books. On January 4, ET reported that Invesco had increased Swiggy’s valuation to $9.5 billion, as of October 31, 2023.Swiggy is also planning a $1-billion initial public offering (IPO). ET reported on January 23 that the company’s IPO is expected to have an offer-for-sale component worth at least $600 million, through which existing investors will offload some of their stake.

The firm’s largest shareholder, Prosus, had reported in December that Swiggy’s loss narrowed 35% from a year ago to $208 million for the half year ended September 30.

Swiggy and Zomato have been battling for a higher share in their mainstay food-delivery market, even as sector experts and analysts have pointed to their quick-commerce verticals driving the next phase of growth. While Zomato owns quick-commerce firm Blinkit, Swiggy operates in the segment through its Instamart vertical.

According to a January note by Bernstein, Zomato held a 54% market share in gross merchandise value (GMV) terms in the food-delivery segment, while Swiggy had 46%.

“Zomato’s active user base continues to grow faster than Swiggy. We expect that Zomato stands to gain higher incremental GMV as compared to Swiggy,” it had noted.

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