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Food delivery giant Swiggy is eyeing $800 million in initial public offerings (IPO) next year and has started preparations for the same, a report by Nikkei Asia said.
This comes after its rival Zomato, which witnessed a stellar debut in markets last year, has seen its shares decline below its issue price. Zomato commands a market capitalisation of about $9 billion (Rs 67,600 crore). Zomato was valued at $5.4 billion before its IPO. SoftBank Group-backed Swiggy has started adding independent directors to the board as the food delivery company also plans to position itself as a logistics company.
Swiggy recently became a decacorn by raising $700 million in its latest funding round led by Invesco, in which it doubled its valuation to $10.7 billion, surpassing its rival Zomato.
Decacorn is a term that refers to startups valued at more than $10 billion.
Amid a boom in demand for food delivery and grocery, especially during the Covid-19 pandemic, Swiggy, after its latest funding round, had said that the gross order value of the company’s core food-delivery business has nearly doubled in the last year.
Swiggy said that the latest fundraise will help it to increase growth on its core platform of food delivery segment in addition to making investments in Instamart. The food delivery company has also that it plans to invest $700 million in Instamart, which has expanded to 19 cities in the past few months.
Swiggy’s IPO preparation comes as India’s markets have been witnessing a reality check after a dream run in 2021.
The shares of Indian startups, such as Paytm, Zomato, Policybazaar and Nykaa, that listed amid much fanfare last year, have been hitting newer lows every other days. Zomato’s shares have slumped 41% since October 1, while Paytm shares are trading at under more than half their listing price. Nykaa’s shares have slumped 33% from its list price while Policybazaar’s have fallen 36%.
Swiggy and Zomato are neck-and-neck in sales. In December, Swiggy claimed monthly sales of $250 million from its food delivery business, while Zomato posted sales of $733 million in the October-December quarter, reported Nikkei.
Swiggy reported a 23% fall year-on-year in revenue at Rs 2,145 crore in financial year 2020-21 (FY21). However, its net loss decreased 65% YoY to Rs 1,314 crore, showed regulatory documents sourced by business intelligence platform Tofler. The Bengaluru-based company’s total expenses stood at Rs 3,310 crore.
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