Swiggy IPO vs Zomato IPO: What Do The Numbers Tell So Far?

Swiggy is gearing up to enter the market with its highly anticipated IPO. But here’s the big question- how does it compare to Zomato, especially since Zomato’s valuation has seen a significant boost over the past year? With Blinkit’s growth contributing to Zomato’s rising numbers, it’s clear that the competitive landscape is heating up.

But what will happen after Swiggy’s IPO? Will it shake up the market, or will Zomato maintain its lead? 

So, let’s go through Swiggy IPO vs Zomato IPO and see what the numbers tell so far!

(A) Swiggy IPO vs Zomato IPO: Comparing the Numbers

The following table compares various aspects of Swiggy IPO vs Zomato IPO-

Note: To understand how Swiggy and Zomato work, you can go through the following articles-

• Swiggy Business Model
• Zomato Business Model

(B) What do the numbers of Swiggy IPO vs Zomato IPO tell so far?

So, Swiggy is about to go public, and everyone’s asking the same question: How will it compare to Zomato? To make sense of this, let me explain the table mentioned in the above section-

(B.1) IPO Size and Timing

Let’s start with the basics- how much money each company plans to raise. Swiggy is looking at a whopping $1.25 billion (around Rs.10,375 crore) for its IPO, scheduled for the end of 2024. Zomato, which went public in 2021, raised Rs.9,375 crore. This gives Swiggy a slightly larger war chest, which could be crucial in expanding its operations and capturing more market share. However, Zomato’s earlier entry into the public market gave it a head start in attracting investor attention and capital.

(B.2) Fresh Issue vs Offer for Sale: Where’s the Money Going?

Swiggy’s IPO will include a fresh issue of Rs.3,750 crore ($450 million), meaning this money will go directly into the company’s coffers to fund growth and expansion. 

Zomato, on the other hand, raised Rs.9,000 crore ($1.1 billion) through its fresh issue—double the amount Swiggy is planning. 

However, Swiggy’s Offer for Sale (where existing investors sell their shares) is significantly larger at Rs.6,664 crore ($800 million) compared to Zomato’s Rs.375 crore ($45 million). This suggests that Swiggy’s investors are looking to cash out more significantly, possibly indicating a different level of confidence in the company’s future performance.

(B.3) Valuation: The Billion-Dollar Question

In terms of valuation, Zomato currently holds the lead with an expected valuation of Rs.1.65 lakh crore ($19.8 billion). Swiggy’s expected valuation ranges between $10 to $12 billion, which is quite substantial but still falls short of Zomato. This gap in valuation could be due to several factors, including market perception, profitability prospects, and investor confidence. Despite the lower valuation, Swiggy’s IPO size and market potential make it a strong contender.

(B.4) Market Share and User Base: Who’s Leading the Pack?

When we look at market share, Zomato leads with 57% as of July 2024, compared to Swiggy’s 43%. This difference is significant and reflects Zomato’s stronger foothold in the market. Zomato also has a larger user base, with 18.6 million monthly active users (as of May 2024) compared to Swiggy’s 14-16 million. 

This larger user base gives Zomato more leverage in generating revenue and staying ahead of the competition.

(B.5) Financial Performance: Revenue and Profitability

Now, let’s talk money. In FY23, Swiggy reported a revenue of Rs.8,265 crore, trailing behind Zomato’s Rs.12,114 crore in FY24. While Swiggy’s revenue is nothing to scoff at, Zomato’s financial performance is notably stronger. 

What’s even more impressive is that Zomato turned a profit of Rs.351 crore in FY24, while Swiggy is still grappling with losses—Rs.4,179 crore ($501 million) in FY23. This difference in profitability could be a decisive factor for investors when choosing between the two.

(B.6) Key Investors and Market Presence

Both companies have strong investor backing. For Swiggy, key investors include Prosus (33%) and SoftBank (8%), while Zomato’s investors feature Info Edge (13.1%) and Antfin Singapore (4.3%). The presence of these heavyweights adds credibility and stability to both companies. When it comes to market presence, Zomato again has a broader reach, operating in 800+ cities across India, compared to Swiggy’s 580+ cities. This larger footprint gives Zomato a wider customer base and more opportunities to grow.

(C) Final Thoughts

In a nutshell, while Zomato currently has the upper hand in terms of valuation, market share, and profitability, Swiggy is no underdog. With its upcoming IPO, Swiggy has the potential to shake things up. The numbers tell a story of fierce competition, and while Zomato leads in several areas, Swiggy’s growth and strategic moves could very well level the playing field in the near future. 

Can Swiggy beat Zomato after IPO? You may wonder.

Ultimately, while Swiggy has the potential to challenge Zomato post-IPO, its success will depend on its ability to improve financial metrics, capitalize on growth opportunities in quick commerce, and navigate the competitive landscape effectively.

Keep an eye on this battle—it’s far from over! Thanks for reading 🙂