Swiggy rewards employees for helping it recover from Covid; offers $7-9m ESOP liquidity programme

Food delivery startup Swiggy has once again undertaken an employee stock ownership plan (ESOP) liquidity programme worth around $7-9 million for its existing employees and those who were let go by the company post Covid, a person aware of the matter told Financial Express Online. Swiggy had first undertaken such programme for employees to liquidate their stocks worth around $4 million back in June 2018 that made it among the youngest internet startups to offer its employees a stock liquidity opportunity. Swiggy had laid off 1,100 employees in May this year followed by another 350 people in the second round of layoffs in July across grades and functions to ease cost pressure amid the Covid pandemic.

Importantly, the offering has come at a time when the online food delivery market is fast scaling back to its pre-Covid levels or beyond for companies like Swiggy, Zomato, and others. The latest opportunity to liquidate stocks is for over 40 per cent of the employees who have ESOP benefits at Swiggy, the source added.

Confirming the development, Swiggy’s human resource Vice President Girish Menon in an email note said that “over 40 per cent of our employees with ESOP benefits – current and those we had to, unfortunately, part ways with earlier this year will be eligible to exercise their stocks. Some of them will be able to liquidate their ESOPs at as much as 3x premium of the allotted price.” The liquidity programme will see participation from the family offices of “India’s leading industrial houses and a few individuals” who are “stalwarts” in their respective fields, according to Menon.

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Food delivery orders for Swiggy, which had dipped to negligible levels post February-March and during the lockdown period, were able to recover across India to around 80-85 per cent of pre-Covid order value, Swiggy had said last month. On the other hand, as per a Zomato analysis, the market had recovered in September till around over 85 per cent of pre-Covid gross merchandise value up.

Swiggy had claimed that is adding more than 7,000 new restaurants per month on its platform — around 3,000 more than pre-Covid. Out of these 7,000 units, 6,000 are small and medium outlets vis-à-vis 3,500 before Covid. Apart from Swiggy, startups including Zerodha, Unacademy, Razorpay, CarDekho, BharatPe, and more had announced similar ESOP liquidity offers for employees in the recent past.