US Investor Baron Capital Slashes Swiggy's Valuation By 34% To $7.1 Bn

Food delivery giant Swiggy is witnessing another markdown in its valuation by an investor. A fund managed by US-based asset management firm Baron Capital Group has slashed the valuation of Swiggy by 34 per cent to $7.1 billion as of December 2022, according to filings with USA's Securities and Exchange Commission (SEC). The filing for this period was submitted in March this year.

In January last year, Swiggy raised $700 million in a funding round that was led by Invesco and saw participation from a host of investors including Baron Capital Group. The funding made the Bengaluru-based outfit a decacorn, almost doubling its valuation to $10.7 billion. Baron Capital reportedly  holds about 0.7 percent stake in Swiggy

Baron Capital had earlier marked down Swiggy’s valuation to $6.7 billion as of June 2022, six months after buying a stake in the company. It then later raised it to $7.1 billion.

This marks the second such action by a US investor for the Indian start-up. As reported on May 8, US investment firm Invesco, which led Swiggy’s previous funding round, marked down the food delivery giant’s valuation by 33 per cent from $8.2 billion to about $5.5 billion, according to a filing. In April last year, Invesco estimated the value of its Swiggy shares at $186 million. It now values them at $95 million. The markdown had put Swiggy’s valuation below Zomato, which was trading with market capitalisation of $6.7-billion. Zomato at one point had market capitalisation of over $13 billion.

However, Invesco’s revised valuation is as of January 31, 2023. This is the second time Invesco had trimmed the valuation of Swiggy, which is backed by SoftBank and Prosus. Last year in October, Invesco marked down the valuation in Swiggy to $8 billion. Swiggy didn’t share comments related to this.

This is another instance of large Indian start-ups facing valuation markdown by investors amid a funding winter and macroeconomic uncertainty. In January this year, Swiggy laid off 380 employees from its workforce of 6,000, citing challenging macroeconomic conditions and a slowdown in the growth of its food-delivery business.

Swiggy reported its losses widened 2.24 times to 3,628.9 crore in FY22 from Rs 1,616.9 crore in FY21, fuelled by a 227 per cent rise in costs. Expenses came in at Rs 9,748.7 crore in FY22 compared to Rs 4,292.8 crore the year before. This is despite Swiggy reporting revenues of Rs 5,704.9 crore, a little over a twofold jump from the previous financial year.

Janus Henderson recently marked down the valuation of API Holdings, the parent firm of medical services firm PharmEasy, by half to around $2.8 billion, marking the second such action by a US investor for the Indian start-up. Funds managed by US-based investment management firm Neuberger Berman also recently marked down by 21 per cent the valuation of the shares they hold in API Holdings. The same funds reduced API Holdings’ valuation to $4.4 billion from $5.6 billion.

US-based investment management firm Vanguard Group has marked down the valuation of ANI Technologies, the parent company of ride-hailing firm Ola, by about 35 per cent to $4.8 billion from $7.4 billion, according to regulatory filings with the US’ Securities and Exchange Commission (SEC).

US-based asset manager BlackRock has reduced the valuation of Byju’s by about 50 per cent to $11.5 billion. This is a sharp decrease from the $22 billion at which the edtech decacorn was valued at in 2022.