Mumbai-based edtech platform upGrad has announced the grant of ESOPs (employee stock ownership plan) to 600 of its 2,500 employees. Meanwhile, logistics software-as-a-service (SaaS) startup FarEye has also announced an ESOP liquidation programme, the first such event in the seven-year-old startup’s history.
Edtech startup upGrad said that the ESOPs are a reward for the company’s stellar performance in 2020 and the hard yards put in by the workforce.
upGrad Cashes In On Big Year
Last year, the company was one of the first among Indian startups to revoke salary cuts, a decision that was implemented in July. The company had imposed 30% salary deductions before the edtech sector witnessed a boom of sorts.
upGrad had previously claimed exponential growth in engagement from February 24 to March 2, 2020, with almost 34% hike compared to the previous week. Then, in the first week of March, the company’s traction went up by 75%. Moreover, the enquiries on the platform also increased by 50% from 2,500 to 3,800 per day.
“We have seen our workforce adapting to the remote-work mechanism with sheer diligence and have worked harder throughout the year, contributing to our steep business growth and driving career outcomes for our learners,” said Mayank Kumar, cofounder and managing director at upGrad, during the company’s quarterly town hall.
upGrad was founded in early 2015 by Ronnie Screwvala, Mayank Kumar, Phalgun Kompalli and Ravijot Chugh and focusses primarily on higher education courses. It claims to have half-a-million users globally, of which 30,000 are paid learners. In 2020, upGrad acquired recruitment and staffing solutions company Rekrut India and Bengaluru-based coaching institute The Gate Academy (TGA). In August, the company raised INR 50 Cr debt from IIFL Income Opportunities Fund.
FarEye’s ESOP Liquidation Scheme
For FarEye, under the ESOP liquidation scheme, eligible employees can liquidate up to 35% of their vested shares, the company said. It also announced the distribution of $739,000 to liquidate eligible ESOP options under this programme.
FarEye, a predictive logistics platform which aims to solve the hassles in last-mile deliveries for enterprises, was founded by Kushal Nahata, Gaurav Srivastava and Gautam Kumar in 2013. The company envisions to develop a transparent, faster and seamless experience for enterprises and end customers’ logistics support.
FarEye last raised funds worth $13 Mn (INR 95.3 Cr) as part of its Series D round led by Fundamentum and KB Global Platform Fund in August 2020. To date, the company has raised $50.8 Mn (INR 372.76 Cr) from six funding rounds.
Startups Hop On The ESOPs Bandwagon
Increasingly being seen in Indian startups at all stages, ESOPs allow an employee at a startup to become a bigger part of the success of the company. Founders and investors share the wealth that the company creates with employees through ESOPs, which also work well for talent retention.
“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.
Earlier this week, Bengaluru-headquartered fintech startup CRED launched an ESOP buyback scheme worth INR 9 Cr ($1.2 Mn) to its employees, which is its first ESOP liquidity programme, two years after the company was founded.