Fables of ESOP | With Khatabook, HealthifyMe Buying Back, the Stanza (Living) continues..
While July witnessed a couple of massive ESOP buyback events, thanks to Flipkart and Upgrad, August was more like the constant drizzle post the storm with a good set of small to medium sized buybacks. One one extreme we had a Series A funded Company InVideo announcing its first ESOP buyback with an undisclosed amount and on the other HealthifyMe announcing a $12 million buyback program.
Let’s do a quick roundup of the month that went by!
ESOP Buyback Roundup — August 2021 ($35 Million worth Buybacks)
August saw 7 ESOP buyback programs with a good range of Series A to Series F funded companies. Cumulatively this amounted to about ~$35 million worth of ESOPs liquidated generating wealth for the employees. Let’s discuss them one by one.
HealthifyMe’s $12 million ESOP Program — A Healthy Outcome for its early Employees
HealthifyMe announced a buyback program to benefit 100 of its current and former employees along with a few early stage investors who are encashing a 15x return. This coincides with their recent $75 million Series C round led by Leapfrog and Khosla Ventures. That’s fairly large proportion allocated to ESOP buyback (16%), much larger than average pools allocated for ESOP liquidation purposes. Quantum wise as well, the average liquidity encashed per employee is pretty high amounting to INR 90 lakhs.
Khatabook announces a $10 million Buyback as part of its $100m Fundraise
Khatabook — the fast growing Kirana-tech startup with over 10 million MAUs announced a $10 million ESOP Buyback program as part of its massive $100 million Series C Fundraise. As part of the announced program, employees can liquidate upto 30% of their vested options. The company has about 200 employees currently. This is an average of INR 35 lakhs and above in case all 200 employees were eligible. Again a good upside for employees for a relatively young company.
Khatabook also used this opportunity to expand its ESOP pool to $50 million, which amounts to an overall ESOP pool of 8.33% which is relatively high for a Series C stage company.
Stanza Living Earmarks INR 35CR for ESOP Buyback to over 800 Employees
Stanza Living which recently raised $170 million in Series D Funding announced a ~$5 million pool for buybacks. The pool size is relatively smaller given the large round size (~3%). This INR 35CR pool will benefit a rather large pool of employees — ~800 which amounts to about INR 4 lakhs per employee. The MD Anindya Dutta also mentioned an ESOP top-up program to reward exemplary employees beyond their annual cash increments.
Licious launches its maiden Buyback with a INR 30CR Pool
D2C Meat startup Licious announced a INR 30CR ESOP buyback program to benefit close to 600 employees. Among one of the first in the industry, even blue-collared employees of Licious will stand to benefit from this ESOP liquidity program. Licious had recently announced a company wide ESOP program issuing grants to over 1,000+ employees. The proposed ESOP buyback program would amount to an average of INR 5 lakh worth cash payout per employee.
This announcement comes immediately post its Series F round of $192 million led by Temasek and Multiples PE.
LocoNav assigns $3 million for its first ESOP and Equity Buyback
Post announcing its Series B fundraise of $37 million by a bunch of investors, LocoNav announced a $3 million buyback program to recognize the contribution of employees and early investors. While investors stand to make 150x returns on their amounts invested, about 50 employees will be eligible to participate in this buyback round.
MoEngage completes an ESOP Buyback program of $1.5 million as part of its Series C1 Round
MoEngage, a customer analytics and channel engagement platform, completed its first ESOP Buyback program worth $1.5 million for its current and former employees. While details regarding number of employees were not shared, the program was announced coinciding with its Series C1 fundraise announcement of $32.5 million. That’s about ~5% worth investment allocated for ESOP buyback.
InVideo announces an undisclosed ESOP buyback post its Series A Fundraise!
In a first, a Series A funded startup, InVideo announced its maiden ESOP buyback to reward its early employees who had been with the startup for over 3 years. Sanket Shah, the founder, over a LinkedIn post announced the program and also called out the need for providing employee liquidity even prior to founders getting any liquidity. He also committed to announcing many more buybacks in the future.
InVideo has raised a $15 million round as part of Series A round and is in talks to raise a $40 million Series B round as per Entrackr report.
Other News
PayTm Provides loans worth INR 100CR to enable ESOP Exercise
In advance to its much awaited $2.2 Billion IPO, PayTm is reportedly assisting its employees with loans to convert options to shares. PayTm has earmarked a pool of INR 100CR for loans to employees to take care of exercise price and perquisite tax associated with the exercise event. This will make it convenient for employees to exercise their options and make the process cashless for them.
That’s all folks for this August edition. Stay safe.
PS: If your startup needs help in structuring and setting up their ESOP plan and managing it through an automated system, do refer them/reach-out to us.
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