Swiggy to buy back employee stock worth Rs 27 crore

Swiggy has confirmed the buyback programme but there are no details yet on its size or eligibility of employees.
Swiggy to buy back employee stock worth Rs 27 crore
Swiggy to buy back employee stock worth Rs 27 crore
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The Indian startup ecosystem seems to be maturing by the day. Swiggy, a four-year old food order and delivery startup is already into offering buy-back facility to employees, facilitating partial conversion of the ESOPs allotted to them into cash, according to an Economic Times report.

Swiggy’s Board of Directors has given its in-principle approval for this and the estimation is that shares worth around Rs 27 crore could be purchased back from employees. The process will be completed in June, but the company has not shared the details of how many employees will benefit from this buy-back. Those wanting to sell their ESOP holdings can shed up to 50% of their holding in this round. For the record, Swiggy has around 2500 employees on its rolls.

It is reported that at the last valuation of the company when it raised $100 million in funding, Swiggy was valued at $705 million and the stocks allotted to employees could be worth around $24 million (approximately Rs 160 crore) or 3.4% of the overall equity.

Incidentally, the company is in the process of raising further funding with DST Global and some other investors and it is being touted as the highest amount in funds raised by Swiggy so far. This could be $200 million and what is more critical is that the company’s valuation itself may jump to $1.3 billion, a meteoric rise from just $31 million when it raised its Series A funding 3 years ago. That would also mean the employees will gain a huge sum when they part with their shares in the proposed buy-back.

If the valuation does reach this figure of $1.3 billion, then Swiggy would push its rival Zomato to the second spot at $1.1 billion, within the food-tech sector and it would also become the fastest to reach this milestone.

Some of the earlier buy-back of ESOP shares in the Indian context include Flipkart and logistics firm BlackBuck.

As mentioned, this augurs well for the Indian startup environment in general and the sincere and bright employees in particular since it gives them enormous encouragement and confidence going ahead.

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