Baron Capital, an investor in Indian food delivery startup Swiggy, has seen a significant increase in the value of its investment. According to new filings, the New York-based firm has marked up the value of its stake in Bengaluru-based Swiggy to $87.2 million. This indicates a valuation of $12.16 billion, surpassing Swiggy’s post-money valuation of $10.7 billion from earlier this year.
This valuation uptick in December is a notable development for Swiggy and the Indian startup ecosystem as a whole. It is especially significant considering that Swiggy’s valuation had previously been written down to a low of $5.5 billion.
According to Baron Capital, Swiggy currently holds approximately 45% of the market share in India’s food delivery sector and is well-positioned to take advantage of the industry’s structural growth. In a separate filing, the investment firm stated that “India’s food delivery industry is still in its infancy and will continue to scale over the next several years thanks to a growing middle class, rising disposable income, higher smartphone penetration, and shifts in consumer preferences influenced by a tech-savvy, younger population.” Additionally, the market has become a duopoly between Swiggy and its main competitor, Zomato, which bodes well for Swiggy’s future profitability and growth potential.
Swiggy made headlines in the previous year with reports of streamlining its expenses and achieving profitability in its food delivery business. This feat has been maintained since, and the startup is now planning to file for an IPO (Initial Public Offering) later this year.
In the meantime, shares of Zomato, Swiggy’s biggest rival, have seen a surge in the past six months as the Gurugram-based company improves its financial standings. As of now, Zomato has a market cap of approximately $17 billion.
Apart from dominating the food delivery market, Swiggy is also a key player in India’s instant-grocery delivery space. The company is continuously expanding its offerings, with plans to enter the consumer electronics market and other categories, aiming for a larger share of the e-commerce market. Swiggy, which boasts top investors such as Prosus Ventures, Accel, and SoftBank, is also offering 20-minute delivery for all purchases.
Interestingly, TechCrunch reported on Thursday that Walmart-owned Flipkart, India’s leading e-commerce platform, is planning to enter the instant delivery space as well.
