Oct 31, 2024

Indian startups continued to buy back employee stock options in 2024, as part of their efforts to reward employees amid the funding winter. Over the years, employee stock option plans (ESOPs) have emerged as a reliable option for new-age tech startups to retain and reward talent. An increasing number of employees are also seeing merit in joining a disruptive startup early on and grabbing a pie of stock options. And they have a good reason to do so. The public listing of fintech giant Paytm in 2021 made 350 current and former employees millionaires, while Zomato’s initial public offering (IPO) paved the way for 8 millionaires. In simple terms, ESOPs allow employees to acquire shareholding in the startup they work for. For instance, more than 200 employees of DeHaat own stakes in the agritech startup, while nearly 1,600 employees of Urban Company own stakes in the hyperlocal company. ESOPs continued to be in vogue in 2024 as well, especially amid the threat of the funding winter. Earlier, Inc42’s Indian Startup Founder Survey 2023 revealed that 55% of startup founders were banking on ESOPs to woo employees back into the ecosystem. Not only did Indian startups issue ESOPs, but a number of new-age tech companies, including IPO-bound Swiggy, Whatfix, and The Sleep Company, also bought back ESOPs in 2024. As of October 2024, as many as 16 startups have announced ESOP buybacks, making their employees richer by over $148 Mn (about INR 1,252 Cr). Last year, only 12 startups participated in ESOP buybacks, which had a cumulative worth of $850 Mn — but that was largely thanks to ecommerce major Flipkart’s $700 Mn liquidity programme. That said, we have curated a list of Indian startups that rewarded their employees in 2024 via ESOP buybacks. So, without further ado, let’s look at it. Editor’s Note: This is neither an exhaustive list. We have listed the startups alphabetically. Startups That Bought Back ESOPs In 2024 Adda247 Google-backed edtech startup Adda247 announced its first ESOP buyback programme in July. The company said it would buy back shares from its employees at 40X the initial purchase price, with at least 130 employees across different roles and functions benefiting from the exercise. Founded in 2016 by Anil Nagar and Saurabh Bansal, Adda247 is a vernacular test platform catering to students from Tier II and III cities, with online courses for government exams, engineering exams and school curriculums from classes I to XII. Backed by marquee investors such as Westbridge Capital and JM Financial, the platform claims to have over 40 Mn monthly users and has 2 Mn students enrolled in its premium courses. Capillary Technologies Founded in 2012 by Aneesh Reddy, Capillary Technologies is a SaaS company that offers an end-to-end customer loyalty platform that provides a view of consumers, and unified, cross-channel strategies to deliver a real-time omnichannel, personalised, and consistent experience for customers. In May this year, the Bengaluru-based company announced ESOP payouts worth $20 Mn for its employees after raising $95 Mn in its Series D funding round in a secondary share sale. Capillary filed its draft red herring prospectus (DRHP) with market regulator SEBI in 2021. However, the company has since deferred its plans to go public. Classplus Founded in 2018 by Mukul Rustagi and Bhaswat Agarwal, Classplus is a mobile-first SaaS platform that allows educators and content creators to build online presence, digitise their offline tuition centres, and sell their courses online. The edtech soonicorn unveiled its second ESOP buyback programme in February. The company then said that at least 150 employees across roles and business verticals are eligible to sell their vested options. However, Classplus didn’t disclose the amount that would be spent on buying back the shares. The Tiger Global-backed startup saw over 30 employees participate in its first ESOP buyback programme worth $1 Mn. DeHaat In June this year, the Peak XV Partners-backed agritech startup announced the completion of an ESOP buyback programme worth INR 10 Cr . From senior vice presidents to field teams, around 153 employees benefited from what was the company’s first such exercise. Founded in 2012 by Shashank Kumar, Amrendra Singh, Shyam Sundar, and Adarsh Srivastav, DeHaat is a full-stack business-to-farmer (B2F) platform that offers end-to-end agricultural services to farmers. Its offerings include distribution of high-quality agri-inputs, customised farm advisory, access to financial services, and market linkages for selling produce. So far, the company has allotted ESOPs worth over INR 100 Cr to more than 200 employees. The company managed to narrow its loss by 50% year-on-year (YoY) in the financial year 2023-24 (FY24) and is eyeing profitability in FY25. Leverage Edu Founded in 2017, Leverage Edu is a study abroad platform that helps students apply to foreign universities. It offers courses across three apps – Study Abroad With Leverage Edu, LeverageIELTS, and the recently launched LeverageTOEFL. In June this year, the Blume Ventures-backed startup concluded its second ESOP buyback programme . Without disclosing the financial amount, the company said more than 50 employees across various departments reaped the benefits from the exercise. Leverage Edu had announced the completion of its first ESOP buyback programme back in 2022. The study abroad startup saw its net loss widen 118% to INR 102.8 Cr in FY23 from INR 47.1 Cr in the previous fiscal year. Operating revenue jumped 3.3X to INR 68.9 Cr from INR 21 Cr in FY22. Meesho Ecommerce startup Meesho bought back shares worth INR 200 Cr from its employees in March, in what was the largest ever ESOP buyback programme in its history. At least 1,200 current and former employees were rewarded as part of the startup’s fourth liquidity programme. Founded in 2015 by Vidit Aatrey and Sanjeev Barnwal, Meesho is an online shopping platform which caters to small businesses and entrepreneurs with pan-India logistics, payment and customer-support services. RECOMMENDED FOR yOU 30th October, 2024 Despite its zero commission model, the startup has been able to improve its top line by relying on advertising and marketing income from sellers and the fulfilment fee it levies on them — something that has stumped even Kishore Biyani . Notably, Meesho is India’s first horizontal ecommerce startup to turn profitable, a feat which it achieved last July. While Meesho has already cracked the unbranded consumer goods space, it now wants to take on the likes of Amazon and Flipkart in the branded category. MyGate In March 2024, Bengaluru-based community and security management startup MyGate, which counts Tiger Global, Acko, Urban Company and xto10X among its investors, announced ESOP buyback from 51 employees. However, the company did not disclose the value of the buyback deal. The buyback plan of 20% of vested shares was for employees that had completed four years at the company. Founded in 2016 by Vijay Arisetty, Vivaik Bharadwaj, Shreyans Daga, and Abhishek Kumar, MyGate offers security solutions for apartment complexes at entry and exit gates, replacing security-related systems such as RFID cards and biometrics. The startup competes against NoBroker’s apartment management platform NoBrokerHood, JioGate and GateKeeper. Pocket FM In April, audio entertainment platform Pocket FM completed its first ESOP buyback worth $8.3 Mn (around INR 69 Cr). The company said several former and existing employees benefited from the programme. Founded in 2018 by Rohan Nayak, Nishanth KS and Prateek Dixit, Pocket FM is an audio series platform offering content across multiple languages and genres such as romance, self-help, and motivation. It claims to have more than 1 Lakh hours of content, including 2,000 plus exclusive audio series and 4 Lakh episodes across genres and languages, on its platform. Propelld Education-focussed fintech startup Propelld bought back ESOPs worth INR 7.05 Cr from 18 employees in August. Based on the performance and potential of employees, the Bengaluru-based company also granted ESOPs worth INR 6.5 Cr to 70 employees. Founded in 2017 by Bibhu Prasad Das, Victor Senapaty, and Brijesh Samantaray, Propelld provides study loans to borrowers via online channels. The startup claims it goes beyond traditional credit parameters to focus on students’ learning capabilities and employment potential to assess their eligibility for a loan. In May this year, Propelld’s NBFC arm Edgro secured a debt of $25 Mn from investors such as Credit Saison India, AU Small Finance Bank, InCred Financial Services, among others. Purplle Founded in 2012 by Manish Taneja and Rahul Dash, Purplle sells beauty products and appliances. It sells products of several D2C brands, including Plum, WOW Skin Science, mCaffeine, Maybelline, and SUGAR Cosmetics, on its platform. In July this year, the beauty ecommerce marketplace announced its largest-ever ESOP liquidity programme, offering liquidity of INR 50 Cr to its employees. Purplle competes against the likes of Nykaa, Myntra, Mamaearth, Tira, among others, in the Indian beauty and personal care market, which is poised to become a $30 Bn opportunity by 2027. Swiggy When it came to creating wealth for its employees through ESOPs, IPO-bound Swiggy was the clear winner this year. In July, the foodtech major said it would buy back shares worth $65 Mn from employees , in what would be its fifth such exercise. At least 3,200 Swiggy employees have made INR 1,000 Cr through the company’s ESOP liquidity programmes so far. Earlier this week, Swiggy filed its red herring prospectus (RHP). Its initial public offering (IPO) will open for public subscription on November 6. The Sleep Company Sleep solutions startup The Sleep Company initiated the second tranche of its ESOP buyback programme in April. The buyback worth INR 2.4 Cr would benefit 105 employees , including 50% of women staffers, it said then. The Sleep Company rolled out the first tranche of its ESOP programme worth INR 83.47 Lakh last year, benefitting around 62 employees. Founded by Priyanka Salot and Harshil Salot in 2019, The Sleep Company offers smart mattresses, chairs, comforters, recliner beds and pillows which are underpinned by its patented SmartGRID technology . While it commenced operations as a direct-to-customer (D2C) brand, The Sleep Company has now transitioned into an omnichannel model and owns 75+ brick-and-mortar stores across Bengaluru, Hyderabad, Chennai, Mumbai, Pune, Delhi, Ahmedabad, among others. Urban Company In May this year, hyperlocal services unicorn Urban Company undertook its fifth and largest ESOP liquidity programme . Around 450 employees participated in the buyback exercise, liquidating ESOPs worth INR 203 Cr, The Hindu BusinessLine reported. The shares sold by employees of Urban Company were lapped up by incoming investor Dharana Capital, along with existing investors Vy Capital and Prosus. Urban Company has reportedly granted ESOPs to around 1,593 current and former employees, of which 784 have cashed out INR 306 Cr through ESOPs till date. Founded in 2014 by Abhiraj Singh Bhal, Raghav Chandra, and Varun Khaitan, Urban Company offers a range of services such as home cleaning, appliance salon and massage, repair services, painting, among others. The Delhi NCR-based startup counts Tiger Global, Prosus, and Steadview Capital among its backers. It has raised more than $646 Mn in funding to date. Earlier this year, Bhal said in a LinkedIn post that Urban Company turned profitable before tax (PBT) in April 2024. Whatfix Business-to-business digital adoption startup Whatfix announced its fourth ESOP liquidity programme amounting to $58 Mn for both employees and investors in October. There appears to be no clarity on how much amount has been earmarked for its staffers. The liquidity programme came on the heels of its announcement of  Series F funding round of $125 Mn , including a secondary share sale from existing investors such as Helion and Eight Roads Ventures. The SoftBank-backed firm last announced an ESOP buyback of $4.3 Mn during its Series D funding round of $90 Mn. Founded in 2013 by Khadim Batti and Vara Kumar, Whatfix’s digital adoption platform offers solutions for onboarding new customers, effective training, and better support to users through contextual content display at the time of need. In a recent interaction with Inc42, Batti said that Whatfix aims to breakeven in the next eight quarters without compromising on growth. Notably, Whatfix trimmed its net loss by 53% to INR 328.33 Cr in FY23, on the back of a reduction in finance costs. WinZO In October, online gaming startup WinZO concluded the fourth tranche of its employee stock ownership plan liquidation . The company said that around 30% of its workforce with at least two years of tenure would be able to liquidate vested ESOPs as part of the buyback programme. For the Kalaari Capital-backed company, it was a “strategic move” aimed at attracting and retaining top global tech talent amid a sharp rise in goods and services tax (GST) imposed on the gaming industry. Prior to this, WinZO undertook three ESOP liquidations between 2021 and 2023. Founded by Paavan Nanda and Saumya Singh in 2018, WinZO is an online skill-based gaming startup that partners with third-party developers to host games on its mobile-based application. XYXX Founded in 2017 by Yogesh Kabra, XYXX is a D2C menswear brand that sells products across multiple categories such as underwear, loungewear and athleisure. The Amazon-backed startup launched its first ESOP buyback programme in April, allowing eligible employees to liquidate their stocks at a 6X premium with zero strike price. Employees across ranks—from senior managers to heads of departments and executive leadership— benefited from the exercise. XYXX, which competes with the likes of DaMensch, claims it is growing at a CAGR of 100% after having posted a revenue of INR 57 Cr in FY22.