Furniture player Urban Ladder is joining the ESOP bandwagon like many startups and is set to offer ESOPs in order to attract senior-level talent, as per the MCA documents filed by the company.
As per the documents, in order to “attract senior-level employees” and to conserve the immediate cash requirements for remunerating them, the board has sought approval from shareholders to give authority to the ESOP committee of the board to “grant options exceeding 1% of the issued capital of the company” to identified employees.
The move comes a few months after Urban Ladder received a Single Brand Retail Trade (SBRT) licence from the Department of Industrial Policy & Promotion (DIPP). Urban Ladder had applied for the single brand licence in September last year when it announced a shift in its business model from online retail to becoming a furniture brand. The company also launched its first experience centre in Bengaluru last year, which was to be converted into an offline retail store.
Founded in 2012 by Ashish Goel and Rajiv Srivastava, the Urban Ladder team now aims to be profitable in the next 18 to 20 months and file an IPO within three years. It currently offers over 4,000 products across various furniture categories including wardrobes, beds, sofas, dining tables and coffee tables. It is one of the most well-capitalised online furniture businesses, backed by Ratan Tata, Sequoia Capital, Steadview Capital, SAIF Partners, and Kalaari Capital. The founders recently raised $15 Mn in February 2017, from Kalaari, SAIF and others, raising the total funding till date to $95 Mn.
The ESOPs are becoming a tool of choice for Indian startups to attract talent and reward employees. In October last year, BlackBuck, an Indian logistics startup has announced an ESOP repurchase plan, through which the opted employees have been offered an opportunity to liquidate a part of their stock options and avail 11X returns within the time period of one year. In the same month, the board of India’s most famous ecommerce startup Flipkart also approved a plan to repurchase employee stock options in a $100 Mn ESOP repurchase plan, benefitting close to 6,000 current and former employees at Flipkart.
By toeing the ESOP path, Urban Ladder is also following a similar trajectory as it competes with Godrej Interio, Home Centre, Nilkamal, Durian Furniture, Style Spa in the offline furniture segment, and not to forget Swedish furniture giant Ikea, which is expected to open its first store in Hyderabad this year.
[The development was reported by ET]