New Delhi: Swiggy, a major player in the Indian food delivery and instant commerce sector, has announced its intention to raise $1.25 billion through an initial public offering (IPO) after receiving approval from its shareholders. The Bengaluru-based company revealed its IPO plans in a filing with the local regulatory authority.
In its filing with the Ministry of Corporate Affairs, Swiggy outlined its strategy to raise $450 million by issuing new shares, along with offering $800 million worth of shares from existing investors in the IPO. Swiggy faces competition from publicly-listed Zomato and Zepto, a StepStone Group-backed unicorn.
The Indian startup ecosystem has eagerly awaited Swiggy’s public debut, scheduled for later this year. Swiggy boasts support from investors such as Prosus, Accel, SoftBank, and Invesco, with its latest valuation standing at $10.7 billion as of early 2022. Some investors, including Invesco and Baron, have even valued Swiggy at over $12 billion.
Although Swiggy initially planned to go public in 2023, it postponed the move due to unfavorable market conditions, as reported by TechCrunch. Bernstein analysts noted that Swiggy holds approximately 45.8% of the Indian food delivery market, with a GMV of $2.57 billion in 2023. The company serves 16 to 17 million monthly transacting users and employs around 375,000 delivery personnel across 600 Indian cities. Swiggy’s food delivery business reportedly operates at a profit.
Swiggy faces stiff competition from Zomato, which also dominates the instant commerce market. Zomato’s acquisition of Blinkit for $568 million in 2022 has bolstered its quick commerce business, with its market capitalization exceeding $20 billion earlier this month.
According to Bernstein analysts, despite entering the food delivery market later than Swiggy, Zomato has managed to gain market share rapidly, with both companies achieving similar sizes in 2020. Additionally, Swiggy’s Instamart quick commerce business and Zomato’s Blinkit are facing increasing competition from Zepto, a Mumbai-based startup expected to reach $1.2 billion in annual sales.
