Swiggy Unveils 2-Year ESOP Liquidity Programmes Worth $35 Mn – $40 Mn

Food delivery unicorn Swiggy has announced to hold two ESOP liquidity events in the next two years worth $35 Mn – $40 Mn at its current valuation. The foodtech platform is currently valued at $5.5 Bn.

All employees holding shares under Employee Stock Ownership Plan (ESOP) at Swiggy will be eligible to participate in both the liquidity events.

These would be its 3rd and 4th ESOP liquidity events. The first was in June 2018 and the second was in November 2020.

The announcement comes at a time when the startup is in advanced talks to close a new round of $500 Mn – $600 Mn at a targeted valuation of $10 Bn from US-based asset maker Invesco.

The foodtech major had closed a $1.25 Bn round of funding led by SoftBank Vision Fund 2 and Prosus in July with a valuation of $5.5 Bn.

Online food delivery platforms have witnessed a surge in business amid the pandemic. Zomato, the key rival of Swiggy, witnessed a blockbuster listing on the stock market and currently has a market capitalisation of around INR 1.05 Lakh Cr.

A report by Google and Boston Consulting Group (BCG) showed that India’s online food ordering market is expected to grow at a compound annual growth rate of 25-30% to touch $7.5 Bn – $8 Bn by 2022.

Several platforms in the startup ecosystem have off late ushered employees with benefits on the ESOPs front.

Logistics and supply chain startup Delhivery recently issued bonus shares to shareholders ahead of filing its draft red herring prospectus (DRHP). The startup held an extraordinary general meeting (EGM) on September 29, where it decided to allot fully paid up 1.68 Cr bonus shares worth INR 10, to equity shareholders in the ratio of 9:1.

IPO-bound One97 Communications which operates digital payments platform Paytm has allotted a total of 18,49,191 equity shares to its 120 employees upon ESOP conversion. Regulatory filings accessed by Inc42 dated October 1 showed that while the majority of the ESOPs were granted at INR 9, some were granted at even INR 4.9, INR 1 and INR 18.

Based on One97 Communications’ previous filings, the startup’s equity shares were worth around INR 1,876. Thus upon further calculation, the converted ESOPs are worth INR 346.9 Cr, which Patym had allotted for INR 2.7 Cr.

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Update | 6th October, 7:06 PM IST

Dates of the ESOP liquidity events updated.

Update | 7th October, 3:02 PM IST

Some part of the text edited for clarity.