On-demand Food and grocery delivery unicorn Swiggy has taken a significant step towards corporate governance by appointing three independent directors to its board. Mallika Srinivasan, Padma Shri awardee and Chairman and Managing Director of Indian tractor major TAFE; Shailesh Haribhakti, Chairman of financial services firm Shailesh Haribhakti & Associates, and Sahil Barua, Managing Director and CEO of public listed logistics start-up Delhivery will join the company’s board as directors, the company said.
“We’re very excited about bringing on Mallika Srinivasan, Shailesh Haribhakti, and Sahil Barua to Swiggy’s Board of Directors. They have very rich and diverse experiences in building sustainable businesses at scale. Getting these new and powerful perspectives and strengthening our governance will immensely benefit us as we march ahead in our mission to bring unparalleled convenience to consumers,” Sriharsha Majety, CEO and Co-founder of Swiggy, said.
This marks the first time in the company’s history that independent directors have been added to its board. The food-tech company’s current board consists of Majety and Nandan Reddy, Co-founders of Swiggy; Larry Illg, CEO of Prosus Edtech and Food; Ashutosh Sharma, Head of Investments- India, Prosus Ventures; Sumer Juneja, Managing Partner, India and EMEA, SoftBank Investment Advisors and Anand Daniel, Partner at Accel.
“I am looking forward to being a part of the Swiggy board. As a young, privately held company, their focus on having the right discipline, governance, and expertise on the board makes me very optimistic about the company’s future, and its ability to bring its mission of delivering unparalleled convenience to users to life,” Haribhakti said.
On its food delivery platform, the company claims to connect consumers to over 200,000 restaurant partners in over hundred of cities. Its quick commerce grocery service Instamart is present in over 25 cities while table booking platform Dineout in present in more than 20 cities.
The appointment comes as a number of well-funded start-ups, including Swiggy, has laid off employees to battle the economic to cut cost as the funding winter has intensified over the last few months. Coupled with the revelation of alleged financial improprieties at GoMechanic, investors across the ecosystem are re-examining their stance on governance and operational ethics in their portfolio. Venture capital funds are setting up stringent governance frameworks—similar to those in listed entities—beyond just legal, financial and technology due diligences. Investors are establishing strict oversight mechanisms including mandatory quarterly reporting of financial disclosures, periodic internal control and audit testing to avoid unwarranted situations.
Swiggy announced sacking of 380 employees as part of its latest layoff process in January. The company conducted a townhall to inform employees about its plan to sack hundreds of workers. Majety provided several reasons for the layoff and apologized for the decision that Swiggy has taken to reduce headcounts.
“We’re implementing a very difficult decision to reduce the size of our team as a part of a restructuring exercise. In this process, we will be bidding goodbye to 380 talented Swiggsters. This has been an extremely difficult decision taken after exploring all available options, and I’m extremely sorry to all of you for having to go through with this,” the company’s CEO said.
The company revealed that the growth rate for food delivery has slowed down, which has resulted in lower profits and reduced income. Though, Swiggy says it has enough cash reserves to sustain itself. The executive has also blamed “overhiring” for its decision to lay off people.
“Over the last year, under challenging macroeconomic conditions, companies around the world (public and private ) are adjusting to the new normal, with refreshed investment horizons and accelerated timelines for profitability. We’re no exception here, and have already advanced our own timelines for profitability on food delivery and Instamart. While our cash reserves allow us to be fundamentally well positioned to weather harsh circumstances, we cannot make this a crutch and must continue identifying efficiencies to secure our long-term,” he told his employees.