Automobile startup CarDekho has announced that it will buy back shares worth $2.5 Mn (INR 17.5 Cr) from its employees, under the Girnar group ESOP repurchase plan, 2019. The company has circulated the offer letter to 71 eligible employees for participating in the repurchase plan.
In a media statement, CarDekho said it will be buying back stocks from both existing and former employees who have served for four years in the company, and are holding vested stocks. These employees will be able to encash 50% of the vested stocks under the plan.
Girnar-owned CarDekho is operational since 2007 and has built a complete ecosystem to enable its consumers to have easy and complete access to buying and selling cars, as well as information on cars.
Amit Jain, cofounder and CEO, CarDekho said, “As a team we had quite an exciting journey over the years. We especially appreciate the constancy of the top management and HODs who have supported the firm’s growth in its developing phase.”
Related Article: Government Bodies In Talks To Ease Taxes On Startup ESOPs
ESOPs: The Reward For Loyal Employees
Indian startup ecosystem has over 39K active startups. These startups have collaborated to hire about 50K to 60K people in the last year itself and the hiring outlook looks positive across sectors in the near term.
To reduce attrition rates and get employees invested in the company’s growth, many startups have taken to awarding stock ownership in form of ESOPs.
CarDekho: Key Developments
CarDekho’s service let buyers and sellers engage with each other for automobile sales. It also wants to manage and improve the entire ownership experience, by facilitating the purchase of accessories, tyres, batteries, and insurance, and providing roadside assistance
So far, CarDekho, owned by Girnar Software, has raised $202 Mn, including the latest funding round of $110 Mn. Prior to this round, the company raised $75 Mn from investors such as Hillhouse Capital, Tybourne Capital, Times Internet, and Sequoia Capital, among others.
Here are a few key financial metrics of CarDekho:
- CarDekho has witnessed a 62% growth in its revenue to reach INR 260 Cr mark in the financial year ending on March 2019. It attributed this growth to the company’s performance in the used car segment.
- The company has claimed a $21 Mn (approx INR 145 Cr.) exit run rate in FY19
- It reported an 8% drop in its pre-marketing burn amounting to $0.2 Mn (approx INR 138 Cr.) for the year
- Its retail car auctions platform Gaadi has reportedly posted over 800 car transactions in 12 stores across Delhi-NCR in the past two months
CarDekho is now looking to leverage and play an important role in the Indian electric vehicle (EV) segment, set to boom by 2021-22.
The Indian automotive industry is expected to reach $251.4 Bn – $282.8 Bn by 2026 and the country is expected to emerge as the world’s third-largest passenger vehicle market by 2021.