Fables of ESOP: August Edition

Written By:
Srikanth Prabhu
September 5, 2022
Fables of ESOP: August Edition

Welcome to the August edition of Fables Of ESOP. The slowdown seen in ESOP Liquidity programs since the last few months continued through August with only one liquidity program announced by SuperShare.

Meanwhile, a handful companies did announce ESOP pool expansions signalling the intent of granting more ESOPs as an instrument to retain their talent amidst the funding crunch and the push to conserve cashflows.

ESOP Announcements Round-Up

Let’s do a quick round-up of programs announced this month.

Series A Funded SuperShare announces its first ESOP Buyback

SuperShare, a series A stage startup, announced its first ESOP buyback this month.

They join the league of very few startups such as Grip Invest etc. that have announced an ESOP liquidity program so early in their growth journey.

Other than this early liquidity opportunity for SuperShare’s employees, this program also allowed for a large share of their vested options to be liquidiated, which is rather uncommon as seen in other programs which typically allows for about 25% of vested options to be surrendered. While in this case, employees are able to liquidate up to 50% of their vested shares.

This is a step towards strengthening employee confidence in ESOPs as a wealth creation tool. As Sagar Modi, the Cofounder and CEO, puts it,

“this is the best way to convey our gratitude to the team that has stayed with us through our seed journey.”

Their Cofounder and COO, Advaith Vishwanath also adds that their ESOP pool is best-in class in terms of vesting frequency and exercise periods as they are competing with world’s biggest tech companies when it comes to talent pool.

Supershare also raised $6.5 million in the first funding round from Lachy Groom, Accel India, and Lightspeed. The round also saw participation from content creators Tanmay Bhat, MythPat among others.

ESOP Pool Expansion Announcements

UpGrad tops up ESOP Pool to have the third largest ESOP pool amongst EdTechs: UpGrad, the edtech startup led by Ronnie Screwala and Mayank Kumar, expanded its ESOP pool by 13% to 2,525,810 options. They added 300,000 options and now it is worth $260Mn. Post this expansion, upGrad has the third largest ESOP pool in the edtech space after Byju’s and Unacademy.

Accel Funded ScripBox expands ESOP Pool: Wealthtech startup, Scripbox has increased its ESOP pool to 1,209,726 options and is now worth Rs. 265.4 Cr. It also recently acquired a Pune-based wealth management startup Wealth Managers to further expand its reach and customer base.

Waycool expands ESOP Pool by 20% worth INR 92CR: Waycool recently announced a $12 million venture debt raise from Trifecta Ventures. Along with this fundraise announcement which came just 2 months post their $40 million fundraise, Waycool also announced an expansion of their ESOP pool by 20% which is worth INR 92CR.

We believe, given the current funding situation and caution exercised by investors in writing large cheques, this trend of limited company led buybacks will continue while companies will aim to expand ESOP pools with an aim to retain their talent.

We are also seeing companies restructuring their ESOP policies to improve coverage and employee friendliness as they seek to attract the best talent.

Opportunity for Secondaries?

That being said, given the continued long-term bullishness that investors unequivocally have reflected about the India growth story, we sense there would be an increased uptake in secondary opportunities for strategic investors, Family offices, HNIs among others as they seek to enter good quality companies opportunistically. Listen to this podcast with Skanda Jayaraman which decodes liquidity programs in growth startups.👇

Do you want an Employee Friendly ESOP Plan? Are you looking to setup an ESOP Plan or do you wish to review your current plan to make it friendly to employees in order to attract the best talent? We at Qapita can help you. Explore ESOP Advisory services.

Stay tuned to Fables Of ESOP.

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


Srikanth Prabhu

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