Food Delivery Platform Swiggy Eyes $800 million IPO, says report

Indigenous food delivery major Swiggy backed by Softbank is eyeing to raise $800 million through an IPO in the early next year, Nikkei reported citing the sources familiar with the matter. As per the report, funds raised by IPO are going to help Swiggy expand its operation, reportedly the company wants to become a logistics company.

Recently, the food delivery giant had raised $700 million led by Invesco which is a US-based investment management company. Swiggy’s current valuation stands at $10.7 billion which made the company a decacorn (Decacron is the company that exceeds the valuation of $10 billion).

What is an IPO?

An IPO or Initial Public Offering is a process using which a company (private or government) offers its shares to the public or investor (new) in order to raise funds and to do so, the company has to be listed on the stock exchange.

During the process of an IPO, the company is mandated to file the offer documents with the Securities and Exchange Board of India (SEBI). The documents carry the information related to the company, the promoters of the company, projects, financial details, objectives behind the fundraising, etc.

Swiggy’s announcement of entering the IPO comes at the time when its rival and the other major player of the food delivery industry Zomato’s shares have seen a sharp decline and its valuations is hitting the lowers marks. Zomato debuted IPO last year and has failed to keep the momentum and continues to struggle.

Along with Zomato, shares of the companies like Policybazaar, Nykaa, and Paytm are seeing a rapid decline. The pandemic-induced economy has been harsh on the startups like Swiggy and Zomato. Swiggy reported a 27 percent fall in its revenue in FY21.

Apart from food delivery Swiggy has recently begun with its instant grocery delivery services named ‘Swiggy Instamart’ that is now competing with Zepto and Blinkit.

Swiggy

Founded by Sriharsha Majety, Rahul Jaimini, and Nandan Reddy in 2014, Swiggy currently carries out its operations in over 500 cities of India as a food delivery giant. The company also owns an instant grocery delivery service named ‘Swiggy Instamart’. Bundle Technologies is the parent company of Swiggy.

It also launched its pickup and dropoff services named ‘Swiggy Go’ for a range of items including laundry, documents, and parcels for its customers from business and retail. Swiggy Go was later on rebranded as ‘Swiggy Genie’ in 2020.

The company had laid off 1100 employees in May 2020 with the beginning of the Covid-19 Pandemic in India. Later in 2021, it announced that it would cover the Covid-19 vaccination cost of its delivery partners.