The valuation is based on Swiggy's financial results from the first half of the fiscal year 2024 (H1 FY24), alongside its growth potential and trajectory toward profitability. In the first six months of FY24, Swiggy generated revenue of ₹7,474 crore, which projects to around ₹14,947 crore on an annual basis by the end of March 2024. The company has confidentially filed for an IPO, which is expected to be among the largest tech listings in India this year. However, Swiggy is anticipated to debut with a valuation slightly below that of Zomato, estimated between $13 billion and $15 billion.
According to the investor presentation from 360 One WAM, Swiggy is nearing EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) breakeven, marking a critical step toward profitability. The company's gross order value (GOV) for H1 FY24 reached ₹17,528 crore, indicating a year-on-year (YoY) growth of 27%.
Swiggy's food delivery segment saw an 18% YoY increase in order volume, while its Instamart division achieved an impressive 57% YoY growth. Furthermore, Swiggy's Dineout service, which provides dining experiences at partnered restaurants, reported extraordinary annual growth of 188%. In H1 FY24, the company managed to lower its monthly cash burn to ₹181 crore, down from ₹336 crore in FY23. This reduction, alongside a robust cash reserve of ₹6,000 crore as of September 2023, positions Swiggy strongly to scale operations while managing expenses effectively.
360 One WAM, a key investor in Swiggy, has played a vital role in the company's growth as it approaches its IPO. Formerly IIFL Wealth Management, 360 One WAM has established itself as a significant player in the Indian wealth management sector, having invested $3 billion across various private equity and venture capital initiatives. In 2022, Bain Capital acquired a 25% stake in 360 One WAM, and the firm recently secured $500 million for its inaugural secondary fund, as stated by its Chief Investment Officer, Sameer Nath. The firm intends to utilize these funds for companies planning to go public within the next two years.
Swiggy’s market positioning becomes increasingly relevant when compared to its nearest rival, Zomato. Zomato, which had its public debut earlier, experienced a surge in market capitalization, reaching $21.5 billion in June 2024 and rising to $28 billion due to rapid growth in its quick commerce division, Blinkit. Swiggy's Instamart, developed in response to Zomato's Blinkit and competitor Zepto, has also become a vital growth engine for the company. This is particularly pertinent as quick commerce demonstrates more dynamism than traditional food delivery, with the sector expanding quickly due to increasing consumer demand for faster delivery of a broader range of products. Unlike the highly competitive food delivery market, which sees more incremental order growth, quick commerce offers substantial scaling opportunities, especially in urban areas and tier-2 cities where e-commerce adoption is on the rise.
