Swiggy posted revenues of Rs 7,474 crore in the first half of fiscal year 2024, 360 One said in its customer presentation. This translates to Rs 14,947 crore on an annualised basis for the year to March.
Food delivery is subject to cyclical changes in orders, so the final figure may vary and will only be known when Swiggy, which has filed a confidential application IPO — reveals its financial results for the year.
This is the last one valuation for Swiggy available through a private investor, even if the The Bengaluru-based company is in the midst of a $1.25 billion IPO process.
Quoted rival Zomato hit a market capitalization On June 25, Swiggy’s fast commerce business Instamart reached a market value of $21.5 billion, its highest value for the month. Its market value has since risen to $28 billion, thanks to the rapid growth of its fast commerce business, Blinkit. Swiggy’s Instamart competes with Blinkit and Zepto in fast commerce.
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These valuations are periodic and different investors can assign different valuations. For example, Baron Capital had valued Swiggy at $14.76 billion in June. compared with $15.1 billion three months earlier. But they are still important as the Prosus-backed firm is expected to secure Sebi approval in the coming weeks and make public its filings for its IPO sometime next month.
Swiggy had last raised funds at a valuation of $10.7 billion.in January 2022.
“Swiggy is fast approaching Ebitda breakeven on the back of improving operational metrics and increased scale. Gross order value stands at Rs 17,528 crore (27% YoY) in H1FY24 – 18% growth in food delivery, 57% growth in Instamart and 188% growth in Dine Out,” the note said.
Swiggy and 360 One, which owns a 0.4% stake in the company, declined to comment.
Swiggy is expected to go public at a discount to Zomato’s market cap, but the extent of this will depend on multiple factors, including its official financials and Zomato’s share price at the time.
“It could be anywhere from $13 billion to $15 billion,” said one person familiar with the talks, adding that these are dynamic ranges and can change close to the IPO announcement.
In recent weeks, new generation companies like Ola Electric, FirstCry and Unicommerce have adjusted their valuations during their IPO launches, leading to an increase in list prices and continued to make profits in the following trading sessions.
Quick in focus
For both Swiggy and Zomato, fast commerce is a major battleground. Compared to food delivery, fast commerce is growing much faster and is increasingly mimicking e-commerce platforms in terms of the variety of products being sold.
As per 360 One’s note, Swiggy’s food delivery revenue grew 23% YoY, with a 111 basis points (1.11 percentage points) expansion in take rate along with 32% YoY growth in average order value (Rs 438 in H1FY24). Instamart, it said, saw 82% YoY revenue growth, 397 basis points expansion in take rate and 20% growth in AOV to Rs 462 in H1FY24. “Overall, monthly cash burn of Rs 181 crore in H1FY24 versus Rs 336 crore in FY23. Cash balance stood at Rs 6,000 crore as of September 2023,” it added.
UBS values Zomato at $32.1 billion — a 15% premium to its $27.8 billion market capitalization at the time of publication of the report this week.
“While express commerce has emerged as the new growth driver as the service expands into new cities and categories, food delivery growth has also surprised positively at (around) 25% versus consensus closer to 20%,” the report said.
The UBS report also noted increasing competitive intensity in the fast-trading segment, with multiple new players keen to enter the space. Flipkart Minutes is the latest entrant, which started offering its service in Bengaluru.
In July, the brokerage firm estimated Blinkit’s market share in the range of 40-45%, with Swiggy Instamart holding a 20-25% share, followed by Nexus Venture Partners-backed Zepto at 15-20%, and Big Basket’s BB Now at 10-15%.
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