Zomato's rival Swiggy's valuation up by 13% to Rs 1 lakh crore: Report

US-based Baron Capital Group has significantly increased the fair value of its stake in Indian food-delivery giant Swiggy, marking the company's valuation at $12.1 billion. This represents a 13% increase from its last fundraising round in 2022, where it was valued at $10.7 billion. 

Swiggy's financial and market position

Despite the broader market's challenges, Swiggy has shown remarkable financial growth. The company's operating revenue surged by 45% year-on-year to Rs 8,265 crore for the fiscal year ending in March 2023. However, its net loss widened by 15% to Rs 4,179 crore.

Swiggy holds a significant market share in the food delivery sector, with Baron Capital noting its position to capitalize on the structural growth within India's online food delivery industry.

Expansion and diversification

Swiggy has expanded beyond its core food delivery service, venturing into quick-commerce through its Instamart brand, dining with Dine Out, and offering parcel delivery services. This diversification supports its valuation and growth prospects, especially as it competes with Zomato, its main rival in the food delivery market.

IPO plans

Swiggy is preparing for a significant milestone with plans for a $1 billion Initial Public Offering (IPO) expected to include an offer-for-sale component worth at least $600 million. The IPO will allow existing investors to offload some of their stakes.

Industry outlook and competitive landscape

The food delivery industry in India is poised for continued growth, driven by a growing middle class, rising disposable income, and higher smartphone penetration. Swiggy and Zomato dominate this market, creating a competitive landscape that fosters innovation and expansion into new service areas.

Despite facing challenges, such as widening losses, Swiggy's strategic moves and the optimistic valuation by investors like Baron Capital highlight its potential for sustained growth and profitability in the evolving market.