Fables of ESOP | Oct Roundup | IPOs & Buybacks usher in a Happy Diwali for Employees| Swiggy pioneers Structured Liquidity for ESOPs
It’s a Happy Diwali this year for employees in the startup ecosystem. Tens of thousands of employees were able to generate wealth for themselves by cashing-out their ESOPs this year. Thanks to the 30+ liquidity programs run by startups backed by their investors as well as startups going/looking to go public in the coming days.
As of October end, over 10,000 employees realised total wealth amounting to $350 million. This is a record year for ESOP liquidity.
For context, Entrackr reported this number to be around $50 million for the whole of last year!
As usual, let’s do a quick roundup of October liquidity programs first. We also have other interesting updates which we’ll cover towards the end. Happy reading.
ESOP Buyback Roundup — October 2021 ($15+ million worth Buybacks)
Meesho buys back ESOP worth $5.5 million
Meesho announced their third buyback program worth $5.5 million for their current and former employees. Further details of the program were not shared. Prior to this Meesho has provided $6 million in employee liquidity across its two buyback programs. Meesho has ambitious hiring plans and these series of buyback programs would go a long way in attracting the right talent.
The buyback program comes on back of their $570 million round led by Fidelity, B Capital Group among other investors.
Chalo plans to buyback ESOPs worth $10 million backed by their $40 million Series C Round
Chalo, a public transport technology firm, has indicated that it will deploy $10 million of its Series C fundraise amount towards buyback of ESOPs to rewards current and former employees. It also intends to enable exits for early angel investors.
While details of the buyback program were not shared, this is one of the largest proportion (25%) of investment capital deployed for ESOP Buyback Program
MobiKwik enables ESOP secondaries and welcomes Unicorn status
MobiKwik officially became the 32nd unicorn of 2021 as the valuation was crystallized by the secondary transaction it enabled for Blackstone India head Mathew Cyriac as reported by Livemint.
Mathew doubled down on his earlier investment by buying shares from MobiKwik employees who decided to exercise their options in advance to their IPO. The transaction was at a price twice of the earlier price at which investor had invested.
Swiggy Pioneers Structured Liquidity Program for Employees | Announces Buyback Programs for 2022 and 2023
With an intention to boost employee confidence, Swiggy has pioneered a Structured Liquidity Program worth $40 million over 2022 and 2023.
This is the first time a startup has committed to doing buyback programs in the future indicating a definite quantum. The indicative amount is based on its current valuation of $5.5 billion. A great initiative to both retain as well as attract best people to one’s company. Well done Swiggy!
And going by the way startup valuations are growing, this might amount to a much higher value at the time of actual buyback.
Other News
- As per Entrackr report, Zerodha expands its ESOP pool by INR 100CR. This is on the back of INR 200CR worth buyback which was announced earlier.
- Teachmint plans to announce its largest ESOP buyback program in the coming days on back of its $78 millioin Series B round led by Rocketship.vc and Vulcan Capital
- Pharmeasy creates a new ESOP pool worth INR 592CR of which INR 236CR is reserved for founders, while INR 356CR would be for employees.
- Delhivery expands its ESOP pool by INR 2.84CR and allots fresh ESOPs to 12 employees in advance to their IPO.
More Fables of Prosperity — Nykaa set to unlock $115 million for its top employees!
After Freshworks 500 crorepatis in September, Nykaa, which is due to list in the Indian markets in a few days, will add further to this list of employee-crorepatis. It is estimated that top 6 employees at Nyka are looking to rake in $115 million of value at the higher band of IPO pricing. And if one were to go by the oversubscription of the issue, this value would further increase.
Great to see more fables scripted and excited about the upcoming IPOs — PolicyBazaar, PayTm, MobiKwik, Oyo, Delhivery, PharmEasy among others
Fables Of ESOP goes to TechSparks 2021!
It was our pleasure to partner with YourStory and curate a stellar Founder’s Roundtable to discuss on attracting and retaining talent in startups. We really enjoyed putting together the discussion points and triggering a timely discussion on ESOPs and best practices for founders. Here are some quotes from what the founders spoke:
Ruchi from OfBusiness spoke about their philosophy: “Employee being a part of the wealth creation process is a part of our fundamental philosophy.”
Shantanu from Bombay Shaving Company spoke about employee awareness: “Employees should have a clear understanding of how much they are liquidating, and founders should provide clear visibility on numbers, especially for the younger employees”
Chaitanya from Wakefit also stressed on the importance of education, tools, and transparency meant for the employees. Regular educational sessions from the external experts, founder, CFO, and finance team have worked wonders for the freshers.
Lakshman from Qapita was hopeful that employees will soon start negotiating more of ESOPs (vs. cash) as they see the impact of liquidity events in the ecosystem.
Overall it was a great conversation on several aspects of ESOPs. Here’s a detailed report from Yourstory.
That’s all for the October month-end round up. Have a happy and safe Diwali!
PS: Btw, we announced our Series A fundraise of $15 million this month as well. Do look us up. We are eager to serve you.
Connect with me: srikanth@qapitacorp.com; LinkedIn; Twitter
