Swiggy’s revised byelaws ask investors to operate at arm’s length from Uber

Swiggy’s revised byelaws ask investors to operate at arm’s length from Uber
Photo Credit: Photo Credit: VCCircle
11 Mar, 2019

Indian online food delivery service Swiggy’s board has approved tweaks to its articles of association that, among other things, severely cap ownership of its investors in foreign rival Uber and its entities, including UberEats.

According to the revised articles of association, aggregate ownership in Uber or its entity cannot exceed 4.99% of the fully diluted share capital. Also, an investor cannot have a seat on the board of directors of Uber or its entity. Moreover, the aggregate amount invested in Uber entities cannot exceed 20% of the assets under management of the investor and its affiliates.

The Swiggy board approved the tweaks in January, which apply to its investors Accel, Coatue Management, DST Global, Hillhouse Capital, Meituan-Dianping (MTDP), Naspers, Norwest Venture Partners, SAIF, Tencent, and Wellington Management Company, said the food delivery service’s documents filed with the Registrar of Companies.

Swiggy’s investor and technology hedge fund, Coatue, holds significant stake in Uber and reportedly stands to gain a lot from the ride-hailing app’s upcoming initial public offering (IPO), as does SoftBank, which is in talks with the online food-delivery firm for an investment.

News of the development comes after reports in February that Swiggy is in talks to acquire the India business of UberEats, the food delivery arm of San-Francisco headquartered ride-hailing app Uber.

Swiggy has been battling rival Zomato closely for a larger share of the food delivery market, apart from adding new business verticals including hyperlocal deliveries.

In December, Swiggy said it had raised $1 billion in a fresh round of funding led by South African technology conglomerate Naspers, marking one of the single-largest infusions into an Indian startup.

Swiggy said that the Series H round also received contributions from new investors including Chinese conglomerate Tencent, Hillhouse Capital and Wellington Management Company.

Apart from Naspers, existing investors who participated in the round included DST Global, Meituan-Dianping (MTDP) and Coatue Management, it added.

The development came two months after TechCircle reported that Swiggy was on the verge of securing $900 million in fresh funding.

Swiggy, run by Bengaluru-based Bundl Technologies Pvt. Ltd, is one of the fastest-scaling unicorns in the country. With the latest infusion, investors have poured around $1.26 billion into Swiggy so far.