Amazon’s potential Swiggy deal is a win-win for both companies

While the Union Budget understandably stole the headlines this week, the biggest news from India’s startup ecosystem was the potential marriage of e-commerce titan Amazon and one half of India’s foodtech duopoly, Swiggy. According to a report in The Economic Times, Amazon India has approached Swiggy—which has confidentially filed draft documents for a $1.25 billion public offering—to either participate in the latter’s pre-IPO round or even purchase its quick commerce offering, Instamart.

A source aware of the discussion confirmed to The CapTable that both companies are in active talks at the moment. The source stated that Amazon’s interest isn’t limited to just Instamart alone but a pre-IPO investment in Swiggy’s entire business.

Amazon’s potential investment in Swiggy could be a timely boon for the latter as it prepares to go public. The discussed valuation for this investment is around $12 billion, according to the person quoted above, setting a benchmark for Swiggy’s IPO. Although Swiggy’s closest competitor Zomato boasts a market cap of close to $24 billion today, Swiggy is aware that its lack of profitability may result in a lower valuation in the public market despite comparable revenue figures.