Online food order delivery major Swiggy is reported to have made some changes to the company’s Articles of Association. Bundl Technologies private limited, which is the name of the company that owns Swiggy made the amendments. The essence of this amendment is that an investor in Swiggy will not claim a seat on the Board of Uber Eats Technologies Inc, the company Swiggy is about to acquire from the US-based ride share company. As reported in Mint, the move is aimed at protecting its turf after the takeover of the food order delivery business of Uber in the Indian market.
These changes to the company’s constitution, include a clause which restricts existing investors in Swiggy from holding more than 20% as a collective entity or more than 4.99% as individual entities in Uber Eats.
Observers and experts say this is becoming a trend among the Indian promoters of startups to make sure they don’t come under any duress in making day-to-day decisions in the companies they control, from the investors. And they highlight that the promoters have become more cautious after what they saw happened at Flipkart when Walmart took it over. The Bansals were both unceremoniously eased out of the company they founded. They might have walked out with huge balances in their bank accounts, but that doesn’t deflect from the way the promoters were treated by a giant like Walmart. And the other case in front of them is Ola, the startup founded by Bhavish Agarwal who is now struggling to keep control of the company owing to pressure brought on by SoftBank of Japan, a major investor in Ola. Agarwal has had to change the company’s AoA as well to ensure that SoftBank cannot acquire the company’s shares from any of the investors unless SoftBank obtains the consent of the two founders of Ola, Bhavish Agarwal, Ankit Bhati and the Board.