Swiggy Eyes $15 Bn Valuation in Anticipated IPO

Swiggy, the SoftBank-backed food delivery giant, is preparing for a significant initial public offering (IPO) in India, targeting a valuation of approximately $15 billion. The company aims to raise between $1 billion and $1.2 billion through this offering, making it one of the most substantial IPOs in India this year.

Swiggy, which competes with Zomato in the online food delivery sector, has invested heavily in the quick commerce segment, where groceries and other products are delivered within 10 minutes. This sector is becoming increasingly competitive and is seen as a key growth area for the company.

In April, Swiggy received shareholder approval to proceed with the IPO, targeting up to $1.25 billion in capital. The company is awaiting approval from the Securities and Exchange Board of India (SEBI) for its confidential filing, which is expected to be cleared within a month. Upon approval, Swiggy will move forward with filing a public prospectus.

Swiggy's last funding round, led by Invesco in 2022, valued the company at $10.7 billion. The final valuation for the IPO could vary, but the target is around $15 billion. The proceeds from the IPO are expected to be used to expand Swiggy’s quick commerce Instamart business and to open additional warehouses to strengthen its position against Zomato.

Zomato, which went public in 2021, has seen its market valuation more than double, currently standing at around $28 billion. Swiggy is looking to capitalize on similar growth in the quick commerce sector. According to a Goldman Sachs report cited by Reuters, quick deliveries accounted for $5 billion, or 45 percent, of India's $11 billion online grocery market in 2022, with the segment expected to grow to a 70 percent share by 2030.

While Swiggy's food delivery operations are profitable, its Instamart grocery delivery service continues to operate at a loss. The company currently operates around 550 grocery warehouses across 35 cities in India.

In related news, e-commerce giant Amazon has reportedly shown interest in Swiggy's Instamart business, although no official offer has been made. Discussions are said to be in the early stages, and the complex nature of the potential deal may pose challenges.