Stake sale · Commerce & Consumer Brands

Flipkart explored buying stake in Swiggy

By Startup Enthusiast · 18 June 2024

What they do

Swiggy is an Indian food delivery and quick commerce platform

Flipkart held verbal talks to buy a stake from investor Prosus, but the deal fell through over valuation mismatch

Prosus seeks to reduce its 33% stake below 26% to avoid promoter tag compliance under Indian rules

Flipkart explored purchasing a stake in Swiggy about 8-10 months before June 2024.
The talks were verbal; no formal binding or non-binding offer was made on paper.
Valuation mismatch and Flipkart's demand for a majority stake caused the deal to fall through.
Prosus, Swiggy's largest investor with a 33% stake, was keen to divest some of its holding.
Flipkart was particularly interested in Swiggy's Instamart quick commerce vertical.
A Swiggy spokesperson denied the development; Prosus and Flipkart did not respond to queries.
Swiggy filed a confidential IPO draft with Sebi in April 2024.

The talks were driven by the disruption of quick commerce in Indian consumer internet.
Flipkart also engaged with Zepto earlier but no deal closed; Zepto later raised $665 million at over 2x valuation.
Zomato, Swiggy’s rival, now has a market cap over $20 billion, boosted by its quick commerce arm Blinkit.
Prosus aims to reduce its stake below 26% to avoid being labelled a promoter under Indian regulations.

Swiggy is a food delivery and quick commerce platform operating across India.
Its Instamart vertical delivers groceries and other items in 10 minutes.
Instamart faces rivalry from Zomato's Blinkit and Zepto.
Swiggy partnered with Hamleys to deliver over 120 toy products (e.g., Disney, Barbie) within minutes.
Instamart's toy category saw 300x order growth since its introduction in early 2024.
Swiggy last raised $700 million in January 2022 at a $10.7 billion valuation.
The company is preparing for an IPO of ₹10,400 crore ($1.25 billion), including fresh shares and an OFS.

Prosus aims to lower its Swiggy stake below 26% to avoid promoter tag under Indian rules.
Swiggy has filed for an IPO of ₹10,400 crore including fresh shares and an OFS.
Flipkart is expected to launch its own quick commerce arm next month (from June 2024).

Prosus (existing) — Dutch-listed arm of Naspers, invested ~$1 billion in Swiggy, holds 33% stake.
Flipkart (buyer) — Indian ecommerce company owned by Walmart.