Flipkart To Use Its $3.6 Bn Fundraise For ESOPs Buyback

SUMMARY

Flipkart to buyback ESOPs worth INR 600 Cr

The move comes after ecommerce giant received $3.6 Bn funding from global investors

Flipkart to provide an additional buyback of 5% of all vested options

Walmart-owned Flipkart has announced buyback of employee stock options (ESOPs) worth INR 600 Cr. The moves come at a time when the Bengaluru-based ecommerce giant raised funding worth $3.6 Bn from global investors including Softbank, which had earlier exited the firm. The investment pushed Flipkart’s valuation to $37.6 Bn.

Flipkart CEO Kalyan Krishnamurthy told employees, “Each of you has played a critical role in helping the company reach this milestone, and the entire management team at Flipkart and Myntra are grateful for your commitment and dedication. As many of you know, it has always been our endeavour to provide our employees with an opportunity to liquidate their vested options regularly. This year we are pleased to announce a buyback of 5% of the past three years’ vested options.”

“With this landmark event for us, I am happy to share that we are offering our employees an additional buyback of 5% of all vested options as we stay committed to wealth creation for you,” he further added.

According to a Times of India report, around 6,000 employees have the option to liquidate upto 10 percent of their vested ESOPs.

He said that the company must sustain their commitment to their existing customers and introduce the value proposition of digital commerce to the next 200 million Indians, ensuring that Flipkart innovate to create value and experiences for them

Earlier in 2019, the startup had repurchased 48,897 employee stock options as against 187,974 in 2018. It had granted 204,940 options during 2019-20 as compared to 294,187 during 2018-2019. Earlier this year, the company had expressed its intentions to buyback ESOPs worth $125 Mn.

The latest round of investment in Flipkart was funded by Singapore’s GIC, Canada Pension Plan, Walmart and also saw participation from Qatar Investment Authority, Disrupt AD, Khazanah Nasional Berhad, Tencent, among others.

Japan’s Softbank which had earlier sold 20 percent stake when Walmart acquired a majority stake in Flipkart in 2018 has re-entered the company with this round of investment.

Founded in 2007 by Sachin and Binny Bansal, the Bengaluru-based ecommerce firm went on to become the Flipkart Group which includes Flipkart, Myntra, and logistics partner Ekart. The group also enjoys a hefty stake in Phonepe. The company directly locks its horns with American ecommerce giant Amazon. Flipkart at present has a user base of 350 Mn and is planning to go public next year with a valuation target of $50 and $60 Bn.