Fables of ESOP
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Fables of ESOP

March 2022 Roundup: 7 companies announce ESOP Liquidity; Urban Company offer PSOPs to its Partners

Thanks to the upward momentum built up over last few months, despite having 6 ESOP liquidity announcements amongst India based companies, March felt like that small speed breaker with the quantum of ESOP Buybacks dipping to about $22 million. We also had one ESOP buyback announced by Funding Societies worth $16 million.

March ESOP Buyback Roundup: $38 million worth ESOP Liquidation by 7 companies in India and SEA

NoBroker, Jupiter, CoinSwitch Kuber, Kristal AI, Fleetx, Rebel Foods and Funding Societies have announced their ESOP liquidity programs in March 2022. Let’s do a quick roundup.

Real Estate rental unicorn ‘NoBroker’ announces ESOP Buyback Plan worth $4.2 million

Tech-based brokerage free real estate start-up NoBroker announced INR 32.2 Crore worth ESOP buyback program for its former and current employees. Company provided the liquidation opportunity to about 95 former and current staff which constitutes about 57% of total employees who currently have ESOPs. This comes after they turned unicorn by raising $210 million as part of their series E funding round led by General Atlantic, Tiger Global Management and Moore Strategic Ventures.

Jupiter announces ESOP buyback worth $4 million

Neo banking platform Jupiter completed its ESOP buyback program worth INR 30 crore which was availed by around 21 of their former and existing employees. The event comes two months after the company announced closure of its $86 million series C funding round from Tiger Global, Sequoia Capital and others.

Kristal.AI unveils its maiden ESOP buyback worth $1 million

Asset management platform Kristal.AI rolled out its first ESOP buyback of INR 7.6 crores for its former and existing employees. In January 2020, Kristal.ai had raised INR 45.6 crores ($6 million) in its series A round led by Chiratae Ventures and Desai Family Office. Since then, the platform quadrupled its AUM and its user base has expanded seven-fold, resulting in 22 times increase in its annual recurring revenue.

Fleetx.io announces ESOP buyback worth $507K

SaaS based fleet management platform Fleetx.io has announced their ESOP buyback program worth approximately INR 3.9 crores to 45 of their current and ex-employees following the closure of their Series B funding round led by IndiaMart.

Fleetx offers a suite of IoT and software-based products to help industries digitise their logistics operations and help them improve safety, efficient and sustainability of their vehicles and operations.

CoinSwitch Kuber completes ESOP buyback worth $2.5 million

Crypto unicorn completed its first ever ESOP buyback worth around INR 19 crores. The buyback is funded through a mix of internal and external resources. The company joined the unicorn club in September, 2021 after closing a $260 million round from American venture capital firms Coinbase Ventures and Andreessen Horowitz.

Rebel Foods announces ESOP liquidation worth $10 million

Cloud Kitchen Unicorn Rebel Foods announced ESOP liquidation worth INR 76 crores. Around 150 current and former employees were eligible to liquidate their vested stock options. The company attained unicorn status with its Series F round of $175 million at $1.4 billion valuation led by Qatar Investment Authority in October 2021.

Funding Societies announces its fourth ESOP Buyback worth $16 million

SEA’s SME Digital Financing platform Funding Societies announced an ESOP Buyback plan worth $16 million for its current and former employees. This is their fourth ESOP buyback program.

Some unique element’s of Funding Societies’ ESOP Program:

  • Company allows new joinees to take upto 50% of total annual salary in ESOPs — giving this optionality is incredible by any standard!
  • Company also rewards loyal employees and re-grants ESOPs on their 2 year anniversary
  • This buyback comes at the previous fundraising share price (Series C+) and at no discount
  • About 120 current and past employees benefited from this buyback.
  • Employees can also choose to keep their vested ESOP as options or exercise them to shares to become shareholders.

These are great initiatives by Funding Societies to encourage and retain their talent. No wonder the company is seeing its lowest attrition rate and highest employee happiness score right now since its inception.

Other News: Urban Company announces PSOPs scheme for Partners worth INR 150CR

Including their extended partners and gig workers as part of long term incentives seem to be a strategy taking ground in multiple companies. After Unacademy’s T-SOPs for their teacher partners last year, Urban Company has carved out a special incentive pool worth INR 150CR for their partner gig workers called PSOP: Partner Stock Ownership Plan.

The company plans to award stocks to thousands of its partners over the next 5–7 years. The initial tranche of INR 75CR has already been approved by the board to be awarded over the next 3–4 years. As the company states in its press release, the PSOP scheme will enable their service partners become shareholders at Urban Company enabling a broad-based wealth creation.

This is definitely a positive initiative and in some sense trend-setting as other gig platforms too would be pushed to incentivise their extended partners. This pool size perhaps represents about 0.66% of their overall equity (assuming $3 billion valuation) which perhaps is not a lot compared to the average ESOP pool sizes seen in the company. Notwithstanding this fact, it is definitely a great initiative as it gives an opportunity for gig workers to participate in value multiplication over a period of time. And as this concept sees acceptance, companies might engage in constant top-ups to the pool just like in ESOPs.

Through initiatives like these, hopefully many more Fables Of ESOPs would be crafted..

Stay tuned to Fables Of ESOP 🙂

Connect with me: srikanth@qapitacorp.com; LinkedIn; Twitter

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A periodic blog on all things ESOPs — freshly brewed at Qapita. Stay tuned to the happenings, trends, insights, interviews and best practices around ESOPs (Employee Stock Ownership Plan). Qapita is an ESOP and Cap Table Management SaaS solution. Write to us at info@qapitacorp.com

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Srikanth Prabhu

Srikanth is an ex-VC turned Operator & currently leads GTM for Qapita, a Fintech SaaS that helps startups manage Captables & ESOP. Mail: srikanth@qapitacorp.com