Swiggy is in talks with Invesco to raise up to $600 million as a part of a fresh funding round, which will value the startup at $10 billion. Existing investors, including SoftBank and Prosus, are also expected to participate in the upcoming round
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Swiggy on Wednesday announced a new plan for its employees to tender their stock options worth $30-40 million over two years based on its current valuation of $5.5 billion.
The Bengaluru-based food delivery platform has set July 2022 and July 2023, respectively, as the timeline for the liquidity events, with all employees holding stock options or Esops eligible to participate.
A company spokesperson said a decision has yet to be taken on whether the Esops would be bought back by Swiggy or it would be a secondary purchase of shares by an investor.
The total value of the upcoming liquidity events will be based on the company’s valuation at that time, a person aware of the internal discussions told Mint.
Swiggy has already bolstered its capital base, having raised a combined $1.25 billion from SoftBank Vision Fund 2 and Prosus in July this year.
According to multiple media reports, the company is in talks with Invesco to raise up to $600 million as a part of a fresh funding round, which will value the startup at $10 billion. Existing investors, including SoftBank and Prosus, are also expected to participate in the upcoming round.
Swiggy’s move underscores a series of similar steps taken by Indian startups in recent months to reward their workforce amid a gush of liquidity from domestic and international investors.
Swiggy’s rival, Zomato Ltd, minted more than 18 millionaires during its $13 billion public listing in July. Business software firm Freshworks Inc. made 500 employees crorepatis or millionaires following its listing on the Nasdaq stock exchange last month.
“As Swiggy grows, we want our team to grow with us and enjoy the fruits of their hard work and valuable contributions. This is an industry-first initiative whereby we are democratizing wealth creation by enabling all our Esop holding employees to participate in our committed liquidity events in 2022 and 2023," said Girish Menon, head of human resources, Swiggy.
“More importantly, by giving them visibility on the Esop liquidity, Swiggsters (Swiggy employees) hold the option and flexibility to plan their cash flow and investments," he said.
This would mark the third and fourth Esop liquidity event for Swiggy, which carried out employee share buybacks in June 2018 and November 2020.
Swiggy’s most recent liquidity event last November was estimated to be worth $7-9 million, with 40% of the company’s Esop holders eligible for the exercise at the time.
Meanwhile, the practice of allocating Esops has also shifted from employees to even non-employee business partners. Meat delivery startup Licious, which turned a unicorn or a private startup valued at at least $1 billion, earlier this week, allocated Esops to 1,000 employees and even its blue-collared workforce.
Edtech unicorn Unacademy announced in July that it would also allocate Esops to its teacher partners.
Startups such as Paytm, which is preparing for its market debut later this year, has expanded its Esop pool from 24.09 million equity options to 61.09 million options and facilitated bank credit for employees to vest their Esops before the public offering.
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