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In the last two months, 10 startups ranging from edtech to ecommerce to supply chain have raised funds through ESOP buyback

Cars24 has consistently led the annual ESOP buyback initiatives for the last four years, for its employees both existing and former

Along with raising funds, ESOP programmes essentially help retain talent in the startups, thus, building employees’ faith in such companies

Continuing with last year’s trend, this year too, we saw 10 Indian startups to have rolled out ESOP buyback initiatives. Last year we saw different sized startups initiating ESOP buybacks, in turn, raising funds for the growth of their businesses. Earlier in 2021, names such as– Swiggy, Unacademy, FirstCry and Zerodha opted for ESOP buybacks and rewarded their employees. 

Along with raising funds, ESOP programmes essentially help retain talent in the startups, thus, building the company’s commitment to the employees. 

Shares granted under the ESOP programme act as an additional income source for the employees who can either encash them if the company is unlisted or convert into stocks in bourses if the company is listed. 

In the last two months, 10 startups ranging from edtech to ecommerce to supply chain have raised funds through ESOP buyback programmes. Here are the Indian startups that initiated ESOP programmes and also, bought a portion of allotted shares. 

Jupiter 

Mumbai and Bengaluru-based neobank startup, Jupiter initiated ESOP buyback for several of its employees across the company. The stock options, obtained from both present and past employees, have amounted to $4 Mn in liquidity transactions. According to its statement, 21 former and present employees have been benefited through these transactions. 

Prior to this, the startup bagged $87 Mn in Series C funding round led by Tiger Global, while QED Investors, Sequoia India and Matrix Partners also participated in the round.

Cars24

Used car marketplace Cars24 announced annual ESOP buyback worth INR 75 Cr to reward its employees. According to its statement, It has consistently led annual ESOP buyback initiatives for the last four years, for its employees both existing and former. Also, the value of total ESOP buyback for the company till date stands at INR 113 Cr.

Earlier in December 2021, the auto ecommerce platform had bagged $400 Mn in its Series G funding round led by Alpha Wave Global. It joined the unicorn club in 2020 after raising $200 Mn in the funding round. So far, it has raised $1.3 Bn in funding. 

LEAD 

Edtech startup, LEAD initiated ESOP buyback worth $3 Mn for its employees. This comes after its recent Series E funding round worth $100 Mn led by WestBridge Capital and GSV Ventures. 

The funding round aided the edtech startup to reach at a valuation of $1.1 Bn, thus, entering the unicorn club and becoming the first Indian edtech unicorn of the year.

This move will help the startup retain talent and also, gain from the program. The edtech startup asserts that nearly 20% of its employees own ESOPs.

slice

Fintech unicorn, slice announced its first ESOP buyback worth $8.6 Mn. The startup informed that nearly 60, both former and existing employees holding vested stocks in the startup were eligible for the buyback. The startup further stated that in this particular ESOP buyback exercise, around INR 1.2 Cr was paid out to eligible and existing employees.

Late 2021, the fintech startup joined the unicorn club after raising $220 Mn in its Series B funding round led by Tiger Global and Insight Partners. The round also saw participation from other investors such as Advent International’s Sunley House Capital, Moore Strategic Ventures, Anfa, Gunopsy among others. Its existing investors Blume Ventures and 8i too participated in the round. 

Bizongo 

Supply chain startup, Bizongo concluded its ESOP monetisation program. As part of the buyback program, nearly $3.7 Mn worth of ESOP was liquidated. 

The startup informed that of the total 102 current and former employees eligible for the scheme, 70% opted for the buyback. Bizongo had kept the total ESOP pool at $4.8 Mn. The ESOPs were offered to employees depending on different stages of their tenure.

FarEye

SaaS startup FarEye announced an ESOP buyback program worth $1.22 Mn. It is reportedly the second buyback to date. Earlier in January 2021, it initiated an ESOP buyback worth $739K.

In the previous year, the startup garnered $100 Mn in its Series E funding round led by Dragoneer Investment Group and TCV. A portion of the capital infusion was used to expand its software platform capabilities and attract talent.

Trell

Social commerce startup,Trell concluded ESOP buyback worth $1.6 Mn. Earlier in August 2020, it had raised $11.4 Mn in a Series A funding round led by KTB Network.

The startup has raised an aggregate of more than $62 Mn in venture capital from investors including Mirae Asset Ventures, H&M Group, Samsung Ventures, LB Investments and others. 

Porter

Intra-city logistics startup, Porter initiated ESOP worth $5 Mn. A statement from the startup said that the ESOP programme is designed for 80% senior and mid management and 20% for lower management.

Earlier in 2021, the startup raised nearly $100 Mn in Series E funding round. It has raised more than $131 Mn in funding to date. 

HomeLane 

HomeLane announced an INR 27 Cr ESOP buyback program, marking its second such program according to the startup. In the previous year, it bagged $50 Mn in Series E funding round led by IIFL AMC’s late-stage tech fund, OIJIF II (Oman India Joint Investment Fund) and existing investor Stride Ventures. 

The startup said, many of its employees invested their gains in homes, cars, retirement funds and also donated to causes they believe in. 

Ninjacart 

Indian agritech startup, Ninjacart concluded ESOP buyback worth more than INR 100 Cr. Both current and former employees of the startup with vested ESOPs as of December last year, are eligible to participate. 

Late 2021, the startup garnered $145 Mn from Walmart-backed Flipkart, valuing it at between $700 Mn and $800 Mn. The startup is also expanding its footprint into the FMCG segment, procuring from big brands and selling to store owners and other resellers.