In a noteworthy twist of fortune, Swiggy, the Indian food delivery startup, has witnessed a favorable shift in its valuation and market standing. The company, backed by investors such as SoftBank, Prosus, and Accel, had faced a challenging year with a significant reduction in its paper valuation and market share due to evolving conditions in the food delivery industry. However, recent developments suggest a more promising outlook for the company.

Invesco, a prominent U.S. asset manager that led Swiggy’s previous funding round, had previously reduced the startup’s valuation to less than $5.5 billion. Still, in a surprising turn of events, they revised their valuation for Swiggy to $7.85 billion by the end of July, as disclosed in a recent report.

Share price of Zomato. Chart: S&P Global Market Intelligence

Invesco’s methodology for reassessing the value of its private investments involves considering the valuations of similar publicly listed companies. Notably, the share price of Swiggy’s rival, Zomato, has surged by 33% since the end of July. This leads to speculation that Swiggy’s current private valuation of $7.85 billion may actually be a conservative estimate, indicating renewed confidence in the startup’s growth potential.

Swiggy is also making significant strides in regaining the market share it lost to Zomato earlier in the year. According to a report by UBS, Swiggy’s month-on-month volume demonstrated a 7% growth in July and a 6% increase in August. Notably, Swiggy outperformed Zomato in both of these months, suggesting that the company is successfully reclaiming lost ground.

Data and Image: UBS

These positive developments come as Swiggy eyes an initial public offering (IPO) in the coming year. With an apparent rebound in valuation and renewed market competitiveness, the company seems well-positioned to face the evolving dynamics of the food delivery industry.