The archive · Commerce & Marketplaces · Financial decision · 2014–2024
Swiggy's loss-making $1.4B IPO funds the 10-minute grocery war
Swiggy listed at a conservative $11.3B to raise $1.4B for Instamart, betting quick commerce can beat Zomato's Blinkit; shares closed 17% higher.
Swiggy
What the business is
India's second-largest food delivery platform, which also runs Instamart, a quick-commerce service promising groceries, wellness and beauty items within minutes.
How it started
Swiggy was founded in Bengaluru around 2014 by Sriharsha Majety and co-founders and grew into India's second-largest food delivery platform, with 14 million monthly active users by late 2024. During the pandemic it added Instamart, pushing into quick commerce — grocery, wellness and beauty products delivered in minutes.
What happened
By 2024 Swiggy's annualized food delivery order value was about $3.3 billion, roughly 25% behind Zomato's, and Instamart's 5.2 million monthly users trailed Blinkit's 7.6 million. The company had narrowed losses but was not profitable, and Instamart still lost money at the contribution-margin level while Blinkit had reached adjusted EBITDA break-even — the gap analysts said investors would price in.
How it ended up
Swiggy priced its $1.4 billion IPO at an $11.3 billion valuation in November 2024, deliberately conservative against Zomato's market value, and listed on November 13. Shares closed up nearly 17% at ₹456 ($5.41), valuing the company at about $12.1 billion and making it 2024's largest tech IPO globally; Prosus said it had made $2 billion on its roughly 25% stake.
Background
Swiggy was founded in Bengaluru around 2014 by Sriharsha Majety and co-founders and grew into India's second-largest food delivery platform. During the pandemic it added Instamart, entering quick commerce — groceries, wellness and beauty items delivered in minutes — a sector that has grown about 77% a year since.
By late 2024 Swiggy had 14 million monthly active users on food delivery, with annualized order value of about $3.3 billion, roughly 25% behind Zomato. Its Instamart had 5.2 million monthly users to Blinkit's 7.6 million, and while Blinkit had reached adjusted EBITDA break-even, Instamart still lost money even at the contribution-margin level.
The $1.4 billion IPO priced at a conservative $11.3 billion valuation — against Zomato's roughly $29 billion market-cap high — and was oversubscribed more than three times. Swiggy listed on November 13, 2024 with shares closing up nearly 17% at ₹456, valuing the company at about $12.1 billion; Prosus said its stake had returned $2 billion, and the listing was the largest tech IPO of the year globally.
What has to be true
- Swiggy set its valuation far below Zomato's market cap to make the offering attractive, and oversubscription of more than three times showed investors would buy the growth story.
- Quick commerce was the sector to fund: it grew about 77% a year, generated over $6 billion in sales, and analysts projected $42 billion in gross order value by 2030.
- Instamart still lost money at contribution margin while Blinkit broke even, so the IPO proceeds were the only route to keep fighting the war.
- The debut, up nearly 17%, validated the pricing, but profitability and antitrust scrutiny of both platforms' delivery practices stayed open questions.
What can be applied
An IPO is a funding round with a ticker: going public while loss-making works when growth is big enough, but listing against a rival already at break-even prices that gap into your stock.
Aftermath
As of November 13, 2024, Swiggy is listed and valued at about $12.1 billion. Prosus, owning roughly 25%, said it had made $2 billion on the investment; SoftBank holds about 8%; some 5,000 employees stood to reap about $1 billion in liquidity. The company remains behind Zomato in food delivery and quick commerce, and its debut came amid antitrust scrutiny of delivery practices and retailer complaints about predatory pricing. With Instamart unprofitable at contribution margin, the open question is whether fresh capital can turn the 10-minute grocery habit into a profitable business.
Sources
- India's Swiggy delivers 2024's largest tech IPO globally
- Swiggy Delivers 17% Surge in Debut as Investors Bet on Indian Quick Commerce
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