US Investment Firm Invesco Slashes Swiggy Valuation By 33% To $5.5 Billion

US investment firm Invesco, which led Swiggy’s previous funding round, has 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 January last year, Swiggy raised $700 million in Invesco-led funding, which made the outfit a decacorn, almost doubling its valuation to $10.7 billion.

In April last year, Invesco estimated the value of its Swiggy shares at $186 million. It now values them at $95 million, according to filings reviewed by tech-focused media platform The Arc.

It said the latest markdown put Swiggy’s valuation below Zomato, which trades 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 has 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.

The news about Swiggy’s valuation cut was first reported by TechCrunch. Swiggy didn’t share comments related to this.

The markdown comes at a time when tech companies are witnessing steep losses and are laying off employees amid a funding winter and macroeconomic uncertainties.

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 Chief Executive Officer Sriharsha Majety cited the company’s over-hiring as a case of poor judgement.

In April this year, Chief Technology Officer (CTO) Dale Vaz resigned after nearly five years at the company.

Swiggy Senior Vice-President Madhusudhan Rao, who has been with the Bengaluru-based firm for more than four years, was appointed CTO.

Karthik Gurumurthy, head of the quick-commerce vertical, Instamart, was reportedly planning to step aside. However, according to sources, he wanted to go on a sabbatical and intends to rejoin Swiggy.

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. 

Swiggy is not the only unicorn where an investor has marked down the valuation. US-based asset manager BlackRock has reportedly reduced the valuation of the edtech giant Byju’s by about 50 per cent to $11.5 billion. This is a sharp decrease from the $22 billion at which the Bengaluru-based edtech decacorn was valued in 2022.

BlackRock has been marking down the valuation of Byju’s since June last year.