Swiggy unveils 2-year, $ 40 million Esop buyback program

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BENGALURU : Swiggy on Wednesday announced a new plan for its employees to offer their stock options worth $ 30-40 million over two years based on its current valuation of $ 5.5 billion .

The Bengaluru-based food delivery platform has set the calendar for liquidity events as July 2022 and July 2023, respectively, with all employees holding stock options or Esops eligible to participate.

A spokesperson for the company said no decision has yet been made on whether the Esops will be bought back by Swiggy or whether it will be a secondary purchase of shares by an investor.

The total value of upcoming liquidity events will be based on the valuation of the company at that time, the spokesperson added.

Swiggy has already strengthened its capital base, having raised a combined $ 1.25 billion from SoftBank Vision Fund 2 and Prosus in July this year.

According to multiple media outlets, the company is in talks with Invesco to raise up to $ 600 million in a new round of funding, which will value the startup at $ 10 billion. Existing investors, including SoftBank and Prosus, are also expected to participate in the next round.

Swiggy’s move highlights a series of similar steps Indian startups have taken in recent months to reward their workforce amid an influx of cash from domestic and international investors.

Swiggy’s rival Zomato Ltd struck more than 18 millionaires when it went public for $ 13 billion in July. Enterprise software company Freshworks Inc. made 500 employees crorepatis or millionaires following its listing on the Nasdaq stock exchange last month.

“As Swiggy grows, we want our team to grow with us and enjoy the fruits of their hard work and valuable contributions. This is an unprecedented initiative in the sector through which we democratize the creation of wealth by allowing all our employees of the Esop holding company to participate in our liquidity events initiated in 2022 and 2023 ”, declared Girish Menon, manager. of human resources at Swiggy.

“Most importantly, by giving them visibility into Esop’s liquidity, the Swiggsters (Swiggy employees) have the ability and flexibility to plan their cash flow and investments,” he said.

This would be the third and fourth Esop liquidity event for Swiggy, which carried out share buybacks by employees in June 2018 and November 2020.

Swiggy’s most recent liquidity event last November was estimated at $ 7-9 million, with 40% of the company’s Esop holders eligible to exercise at the time.

Meanwhile, Esops’ attribution practice has also shifted from employees to even non-employee business partners. Meat delivery startup Licious, which turned a unicorn or private startup valued at at least $ 1 billion earlier this week, allocated Esops to 1,000 employees and even its blue-collar workers.

Unicorn Edtech Unacademy announced in July that it would also allocate Esops to its teaching partners.

Startups such as Paytm, which is gearing up to debut in the market later this year, have expanded their Esop pool from 24.09 million stock options to 61.09 million options and have made bank lending easier. to employees to acquire their Esops before the public offer.

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