BharatPe Creates ESOP Pool Of $20 Mn To Attract Top-Level Talent

Merchant-focused payments and lending platform BharatPe has created an employee stock options (ESOP) pool of around $20 Mn. The Delhi-based startup will reportedly allow employees to vest 25 percent of their pool after completion of the first year and 75 percent post that over the next three years.

“My aim is to attract top-level talent from the industry across sectors like commerce, financial services and FMCG, the ESOP pool will be a major attraction in that endeavour,” Ashneer Grover, chief executive officer, BharatPe told Tech2.

The digital payments platform has already given out shares worth $5 Mn to 22 existing employees and will be giving out shares from the pool to ten employees, who will be hired soon to lead the company’s business verticals. “I am trying to build out the entire top management across lending, technology and products to drive the next round of growth,” Grover added.

The payments platform was cofounded by Grover and Shashvat Nakrani in 2018. In August 2019, BharatPe raised a $50 Mn funding round led by Ribbit Capital and Hong Kong-based Steadview Capital. With the new round, the company’s total funding stood at $68 Mn.

Earlier in April 2019, BharatPe had raised a $15.5 Mn Series A funding round from Insight Partners, Sequoia, and Beenext.  BharatPe offers merchants a single interface for all existing UPI apps such as PayTM, PhonePe, Google Pay, BHIM, Mobikwik, Freecharge, TrueCaller among 100 other UPI transaction applications.

The fintech startup also enables merchants to track their transactions and settlements, manage sales record and also earn periodic cashback. The company offers loans in the range of INR 10K to INR 1 Lakh at an interest rate of 1.67% per month. The startup had partnered with Apollo Finvest to enable lending on its platform.

ESOPs Help Startups Retain Employees

ESOP buyback is a relatively recent phenomenon with startups. The trend started in 2018 when Flipkart announced a 100% buyback option of vested ESOPs. Razorpay, Oyo, Flipkart, Moglix also joined the bandwagon recently.

Razorpay’s investors, Ribbit Capital and Sequoia Capital, reportedly purchased stocks worth $4 Mn (INR 28.8 Cr) of employees across verticals. This is the second time the company opted for ESOPs. Earlier, in November 2019, around 140 employees of Razorpay took part in the first liquidity event for the company led by the US-based marquee investor, Tiger Global.

For Moglix, the company itself, along with other investors, undertook an INR 5 Cr to INR 10 Cr buyback from eligible employees. ESOPs allow an employee at a startup to become a bigger part of the success of the company.

“Most employees of startups are youngsters who are generally not aware of ESOPs. When they come to know, it’s a great feeling and they feel part of the team. Startups today also want to share profits with employees. It gives employees better ownership,” Harsh Jain, cofounder and COO of wealth management platform Groww, told Inc42 in an earlier interview.