Swiggy, the prominent food delivery player backed by SoftBank Group Corp., is making strides towards a potential initial public offering (IPO) in 2024. The company, which paused its IPO plans due to market uncertainties, is now engaging in discussions with investment banks to evaluate its valuation, according to sources familiar with the matter.
Having achieved a valuation of $10.7 billion in its last funding round in 2022, Swiggy is using this figure as a baseline for its IPO preparations. However, the company has not yet finalized the extent of its stake sale or ultimate valuation.
Swiggy’s decision to reinitiate its IPO planning is in response to the recovery of both global and Indian markets. The company has invited eight investment banks, including J.P. Morgan, Morgan Stanley, and Bank of America, to present their pitches in early September for potential involvement in the IPO process.
While Swiggy had initially contemplated raising between $800 million to $1 billion through the IPO, the exact fundraising target remains to be determined. The company has indicated its intention to list on the stock market between July and September 2024, following India’s national elections scheduled for May.
Swiggy’s resurgence in IPO considerations aligns with the positive momentum witnessed in India’s financial markets. Rival food delivery company Zomato has experienced a significant rise in its shares this year, indicative of renewed investor confidence. Additionally, Indian grocery startup Zepto recently achieved a valuation of $1.4 billion, marking a significant milestone in the country’s startup ecosystem.
Swiggy’s move towards a potential IPO comes against the backdrop of the company’s achievement of profitability in its core food delivery business in May. Although the newer grocery delivery service, Instamart, continues to incur losses, Swiggy’s successful pivot towards profitability within the food delivery sector showcases its strategic acumen and adaptability in the ever-evolving food technology landscape.