Exclusive: Meituan sells over $200 Mn worth stake in Swiggy

Chinese food delivery and lifestyle e-commerce platform Meituan has sold over $200 million worth of its stake in Swiggy to a US-based investor in a secondary deal, according to three sources who spoke to Entrackr. Meituan first invested in the Bengaluru-based firm in 2018 and increased its holding by participating in another round in 2020. 

“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 requesting anonymity as the transaction is private.

While the precise stake Meituan divested in Swiggy and the exact valuation details remain undisclosed, sources indicate that Meituan sold part of its holding based on an estimated valuation of $10 billion.

Currently, Meituan (via Inspired Elite Investments) holds a 3.88% stake in Swiggy, according to startup data intelligence platform TheKredible. 

Meituan operates a diversified digital platform in China, covering services like food delivery, hotel booking, and ride-hailing. Hailed as "the super app" for lifestyle services, Meituan applies a high-volume, low-margin strategy similar to Swiggy’s model in India.

Meituan is one of several investors, including Elevation Capital and Norwest, that have sold their stakes in Swiggy ahead of its anticipated public listing. According to media reports, other major shareholders like Prosus and Accel may also reduce their holdings through secondary sales. 

Queries sent to Swiggy and Meituan did not receive an immediate response. We will update the story if they respond.

Swiggy is set to make its public debut within the next three weeks. According to its draft red herring prospectus (DRHP), the company plans to raise $450 million through a fresh issue of shares, along with an undisclosed amount through an offer for sale (OFS).

The firm reported a 36% increase in FY24 revenue, which rose to Rs 11,247 crore, up from Rs 8,265 crore in FY23. During the same period, the firm cut its net losses by 44%, bringing them down to Rs 2,350 crore.

Swiggy’s competitor, Zomato, achieved profitability in FY24, reporting revenue of Rs 12,114 crore. Driven by rapid growth from BlinkIt, along with Hyperpure and core food delivery, Zomato’s market capitalization has nearly doubled since its public listing in July 2021. At the time of listing, it was valued at $13 billion, while its current market cap is approximately $27.3 billion.