In a secondary deal, Meituan, a Chinese food delivery and lifestyle e-commerce platform, sold a US-based investor more than $200 million of its Swiggy stake, three sources told Entrackr. Meituan participated in a second round of funding in 2020 after initially investing in the Bengaluru-based company in 2018.
“Meituan has sold part of its stake in Swiggy last week in a deal worth anywhere between $200-220 million,” said one of the sources.
According to sources, Meituan sold a portion of its holdings in Swiggy based on an estimated valuation of $10 billion, though the specific amount of the sale and the specific valuation details are still unknown.
The media reports that Meituan (through Inspired Elite Investments) currently owns 3.88% of Swiggy.
Meituan is a multifaceted digital platform that offers services such as ride-hailing, hotel booking, and food delivery in China. Known as “the super app” for lifestyle services, Meituan uses a low-profit, high-volume business model that is comparable to Swiggy’s in India.
Meituan is among a number of investors who have sold their Swiggy holdings before the company’s planned public listing, including Elevation Capital and Norwest. Media reports suggest that other significant shareholders, such as Accel and Prosus, may also use secondary sales to lower their holdings.
Within the next three weeks, Swiggy is scheduled to launch to the general public. The company intends to raise $450 million through a new share issuance and an undisclosed amount through an offer for sale (OFS), per its draft red herring prospectus (DRHP).
The company’s FY24 revenue increased by 36% to Rs 11,247 crore from Rs 8,265 crore in FY23. The company reduced its net losses to Rs 2,350 crore during that time, a 44% decrease.
Zomato, Swiggy’s rival, turned a profit in FY24 with Rs 12,114 crore in revenue. Due to the quick expansion of BlinkIt, Hyperpure, and core food delivery, Zomato’s market capitalization has almost doubled since going public in July 2021. Its current market capitalization is roughly $27.3 billion, compared to its $13 billion valuation at listing.
