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Zomato Ltd co-founder Deepinder Goyal donated 700 crore worth of stocks to Zomato Future Foundation (ZFF) to finance the education of children of its delivery partners.

Goyal was granted the stock options before Zomato went public last year, and some of them were vested last month, he said in a statement. Regulations mandate a minimum one-year lock-in before vesting.

Zomato Future Foundation covers the education of up to two children of all delivery partners working for the company. The foundation offers up to 50,000 per child annually for riders who have been with the company for more than five years.

The amount doubles to 1 lakh after the rider completes 10 years. The foundation also covers higher education scholarships, special programmes for girl children and livelihood support for families of its delivery partners in the event of unfortunate circumstances such as accidents.

Goyal said that all the proceeds from the shares will be given to the foundation. However, Goyal won’t sell these shares immediately to protect the interests of the shareholders and to reap the most benefit for the foundation.

“For the first year, I will liquidate less than 10% of these Esops towards this fund," he said.

He also said that the foundation will be open to donations from other employees besides organizing other fundraising events. The foundation will also establish an independent governance board.

Goyal’s move underlines how far India’s startup ecosystem has come and how more founders of new-age companies could be joining the league of corporate honchos in philanthropy.

Azim Premji of Wipro, Shiv Nadar of HCL Technologies and Mukesh Ambani of Reliance Industries were the top three philanthropists, according to the EdelGive Hurun India Philanthropy List 2021.

Notably, Premji was the first Indian to sign the Giving Pledge in 2010, and since then, he has transferred 67% of Wipro to the Azim Premji Endowment fund.

Giving Pledge is a campaign created by Warren Buffett, Melinda French Gates, and Bill Gates to encourage the wealthy to contribute a majority of their wealth to philanthropic causes.

Last year, the India Philanthropy List also had names of founders of relatively younger companies.

Zerodha founders Nithin and Nikhil Kamath debuted on the list last year with a donation of 25 crore. Flipkart co-founder Binny Bansal increased his annual donations by 155% to 14 crore last year.

The India Philanthropy Report 2022, released this year by Bain & Co., noted that donations by Indian high net worth individuals could increase with the rise of Indian startups and young tech entrepreneurs.

Shriram Subramanian, founder of corporate governance advisory firm InGovern Research, said that the intention of creating the ZFF is commendable.

“However, unless Zomato works towards profitability and creating wealth for all shareholders, these Esops could just go underwater. The Zomato stock price is already below its IPO issue price, and looking at the stock rout in the US, the stock prices of these loss-making unicorns face a bleak future," added Subramanian.

Last year, Zomato became the first Indian internet unicorn to make its stock market debut, taking its market valuation to 1 trillion shortly after listing. The food aggregator is currently valued at less than half that, at about 47,625 crore. Zomato was the largest initial public offering to hit the Indian bourses since SBI Card’s 10,341 crore IPO in March 2020.

Zomato’s IPO also had set the tone for the public float of other new-age companies such as Paytm, PolicyBazaar and Nykaa. However, the stocks of these new companies have taken a beating in the wake of geopolitical uncertainties and policy tightening by central banks.

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