SUMMARY
- Meituan offloads over $200 million stake in Swiggy to a US investor, marking a major secondary sale.
- Swiggy prepares for its IPO in three weeks, aiming to raise $450 million through new share issuance.
- FY24 revenue grew by 36% to Rs 11,247 crore with a 44% reduction in losses.
Chinese food delivery and e-commerce giant Meituan has reportedly sold over $200 million worth of its stake in Swiggy to a US-based investor in a recent secondary transaction. Meituan, which first invested in the Bengaluru-based food delivery platform in 2018 and increased its stake in 2020, divested a portion of its holding last week at an estimated Swiggy valuation of $10 billion, according to sources.
Currently holding a 3.88% stake in Swiggy through its Inspired Elite Investments entity, Meituan operates a super app model in China, offering a range of services from food delivery to ride-hailing. Known for its high-volume, low-margin strategy, Meituan’s model aligns with Swiggy’s approach in India.
The recent stake sale by Meituan aligns with broader investor activity, as shareholders Elevation Capital and Norwest have also exited, with Prosus and Accel expected to follow suit. This stake reshuffling comes as Swiggy prepares for its IPO debut within the next three weeks. According to its draft red herring prospectus (DRHP), Swiggy aims to raise $450 million through a fresh issue, with additional funds anticipated through an offer for sale (OFS).
Swiggy has shown substantial growth, reporting a 36% increase in revenue in FY24 to Rs 11,247 crore (from Rs 8,265 crore in FY23), and reduced its net losses by 44% to Rs 2,350 crore. However, its main competitor, Zomato, achieved profitability in FY24 with Rs 12,114 crore in revenue, driven by its rapid growth in BlinkIt, Hyperpure, and food delivery services. Zomato’s market cap has doubled to approximately $27.3 billion since its IPO in 2021, highlighting competitive pressures for Swiggy.
