Urban Company has received board approval for the first tranche of INR 75 Cr worth of stocks, to be disbursed over the next 3-4 years
The startup also offers a safety net to its partners in the form of insurance and access to financial support
It will set up an evergreen trust to manage the PSOP plan, and award them at near zero cost to service partners
Gurugram-based hyperlocal services provider, Urban Company has announced a Partner Stock Ownership Plan (PSOP) for its service providers. Under this plan, the company will award stocks worth INR 150 Cr to thousands of service partners over the next 5-7 years.
According to its statement, Urban Company will set up an evergreen trust to manage the PSOP plan, and award them at near zero cost to service partners. It has already got board approval for the first tranche of INR 75 Cr worth of stocks, to be disbursed over the next 3-4 years.
“Urban Company’s PSOP will help thousands of service partners become shareholders of the company, thereby enabling broad-based wealth creation through equity sharing. This is perhaps the first of its kind plan globally, where gig workers become shareholders of the very platform they work with,” said Raghav Chandra, cofounder of Urban Company.
Founded in November 2014, Urban Company is a tech-enabled home services marketplace. It offers services such as beauty and spa at home, cleaning, plumbing, carpentry, appliance repair, painting, etc through its mobile app and website. It operates in more than 50 cities in India, the UAE, Singapore, Australia and The Kingdom of Saudi Arabia.
In June 2021, the startup joined the unicorn club after raising $255 Mn in Series F funding round led by Prosus Ventures, Dragoneer and Wellington Management.
“This (the move) will allow our service partners to benefit from the company’s growth in the coming years. This PSOP plan underscores our commitment to empower service partners and treat them as equal stakeholders in the company building journey,” Chandra added.
The company stated that it will set up a fair and meritocratic process to grant these stocks, taking into account both the performance of service partners and their longevity on the platform. The entire process will be rule-based and transparent, with an advisory panel providing overall guidance.
Further, it also offers a safety net to its partners in the form of insurance and access to financial support. All active partners on the UC platform in India are covered under the Group Life and Accidental Insurance cover. Some of the key aspects covered under the policy are life insurance (INR 6 lakhs), disability cover (INR 6 lakhs), accidental hospitalisation (INR 70,000), accidental OPD treatment (INR 10,000), among others.
According to the Inc42 report, earlier in January this year, Urban Company (UC) has on-boarded doctors- primarily dermatologists to offer free medical counseling specifically on skincare to its customers. The startup is currently piloting free medical counseling in a few selected cities.
Late in 2021, the startup concluded its fourth (and largest) ESOP round worth INR 55 Cr, taking the total across four rounds to INR 100 Cr. Interestingly, only 4.4% of the vested ESOPs held by current employees and 10% held by ex-employees were liquidated. A majority of the shares was purchased by existing institutional investors of the home services provider.