Early backers of Swiggy have received partial exits from the food delivery firm as other investors increased their stake in the company over the last few years.
Venture capital firms such as SAIF Partners, Accel Partners, Norwest Venture Partners, RB Investments, Harmony Capital and Bessemer Venture Partners have collectively raked in $222 million (Rs 1579.2 crore) as their shares were transferred to late-stage investors Naspers Ventures, Inspired Elite Investments, DST Euro Asia and Coatue PE Asia, according to Swiggy’s regulatory filings.
They collectively earned a 10X return on their combined investment of $22 million across Series A, B, C and D rounds over the years.
According to the filings analyzed by Entrackr, SAIF Partners received $61.8 million (Rs 439 crore) in FY19 from their investment of $5.9 million (Rs 42.15 crore) during Swiggy’s Series A in 2015. At the same time, Accel Partners gained $25.2 million (Rs 179.1 crore) on its first investment of $2.06 million (Rs 14.66 crore), giving them a 12.2X return.
While both SAIF and Accel had invested in the Series A round where they picked up a stake at Rs 18,942.38 per share, Accel managed a higher return as they waited it out and got their exit later in FY19 when Swiggy’s share price soared to Rs 2,31,316 per share from Rs 1,19,256, registering a 94% growth. On the other hand, SAIF’s shares were transferred out in both major rounds during the same period in August 2018 and Jan 2019.
Mauritius-based Norwest Venture Partners managed to generate the highest returns as compared to other early backers of Swiggy. The VC firm had poured in $3.2 million (Rs 23.1 crore) in Swiggy’s Series B round in 2015 when the share price had gone down 36% as compared to Series A. They too offloaded their investments alongside SAIF but managed a whopping 17.4X return on the transfer worth $56.6 million (Rs 402.3 crore).
Meanwhile, RB Investment and Harmony Capital had injected $1.7 million (Rs 12.26 crore) and $2.3 million (Rs 16.14 crore) respectively in the Series C round in January 2016. The two investors earned $14.9 million (Rs 106.4 crore) and $19.59 million (Rs 139.13 crore). Both investors scored over 8X return on the invested amount.
During Swiggy’s Series D round in September 2016, Bessemer Partners had infused about $6.8 million (Rs 48.83 crore). This resulted in a return of $44.12 million (Rs 313.3 crore) for the Menlo Park VC firm.
Apart from investors, promoters of Swiggy — Sriharsha Majety, Nandan Reddy, and Rahul Jamini — also offloaded 310 equity shares each to Tencent Cloud Europe, HH BTPL Holdings II, and MIH investments to collect $3 million (Rs 21.51 crore) in total making $1 million (Rs 7.17 crore) each.
Looking at Swiggy’s growth chart and mounting revenues which increased 2.7X to Rs 1,121 crore in FY19, these substantial returns make a lot of sense. The company’s valuation stood near Rs 253.45 crore at the end of FY16 which ballooned almost 86X to reach Rs 21,725.4 crore.
This secondary exit follows a series of secondary stake sales that have taken place in the Indian startup ecosystem over the last 12-18 months. Companies including Paytm, OYO, PolicyBazaar, Lenskart, BYJU’s and Dream11 amongst many others have recently offered divestment to their early backers.
What also makes it interesting is that until a few years ago, venture capitalists would have to wait for several years to receive an exit most likely through a public listing or an acquisition. However, secondary stake sales have been on the rise providing early investors a way out — at least a partial one