The payment is the second tranche of a two-year liquidity programme announced in June last year. Over 2,000 employees, including those who transitioned from Dineout after its acquisition by Swiggy, will be eligible for this payout. Swiggy currently has between 6,000 to 7,000 employees. Employees can opt to receive between $27 million and $30 million in the second tranche of the programme.
The Bengaluru-based firm intends to make the payouts alongside the July salary payments, at the start of August. Only current Swiggy and Dineout employees are eligible under the programme. For Swiggy employees, Esops vested on or before April 1, 2023 will be eligible for the payout, while for Dineout employees, Esops vested on or before July 1, 2023 will be eligible for the payout.
“Our team is Swiggy’s most valuable asset and we are happy that macroeconomic conditions notwithstanding, we’re able to keep our commitment of sharing Swiggy’s success and growth through these wealth creation opportunities,” Girish Menon, head of HR at Swiggy, said in a written statement.
In the first tranche of the liquidity programme announced last year, Swiggy employees could opt to receive up to $23 million against their Esops. Over 900 people were eligible to participate in that round. Swiggy conducted its first share buyback in June 2018, while the second one in November 2020 was commissioned via a secondary sale in the range of $7-9 million.
The Esop payment is happening amid a global funding crunch for startups that has hit the Indian ecosystem hard. However, it follows a $700 million Esop buyback by e-commerce major Flipkart earlier this month, as part of a $1.5-2 billion funding round in PhonePe.
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In an interview with ET earlier this month, Rohit Kapoor, CEO of Swiggy’s food marketplace and Dineout, said he had shifted his focus back to growth over the past few months instead of just focusing on profitability, as the firm’s performance started improving.Swiggy founder and group CEO Sriharsha Majety said in May that the core food delivery business had turned profitable in March 2023, after including all corporate costs but excluding Esops. SoftBank-backed Swiggy was last valued at $10.8 billion following a $700-million round in January 2022.
According to the latest annual report for Prosus, its largest investor, Swiggy’s losses in calendar year 2022 ballooned 80% from the previous year to over $545 million. Prosus’s share of Swiggy’s revenues for 2022 stood at $297 million, indicating that the food-delivery platform’s overall revenue for the year was about $900 million. Prosus holds a 33% stake in Swiggy.
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