WestBridge Capital-Backed Sunstone Rolls Out ESOP BuyBack Plan

SUMMARY

Sunstone has initiated the ESOP buyback plan worth INR 18 Cr for 20 of its former and existing employees

The development comes six months after Sunstone raised $35 Mn in a Series C funding round led by Westbridge Capital

So far, the startup has raised a total of $67.7 Mn from various investors

Edtech startup Sunstone announced on Monday (30 January) that it has initiated an ESOP buyback plan worth INR 18 Cr ($2.2 Mn ) for 20 of its former and existing employees.

This programme was led by existing investor WestBridge Capital.

“As a part of this buyback policy, 57% of the vested shares held by the employees taking their exit were eligible for selling,” Sunstone said in a press statement.

It is important to note that startups roll out ESOP programmes to retain existing employees and acquire talent in the industry. In 2022, several Indian startups initiated ESOPs worth over $196 Mn in aggregate for employees, as per Inc42.

The development comes six months after Sunstone raised $35 Mn in a Series C funding round led by Westbridge Capital. Alteria Capital had also participated in the round.

Set up in 2019 by Ashish Munjal and Piyush Nangru, the Delhi-based edtech startup collaborates with educational institutions to offer undergraduate and postgraduate courses to students.

The startup follows a pay-after-placement business model and provides training programmes to students post their studies.

“At Sunstone, we have always believed that our greatest strength is our employees. This first-ever ESOP buyback is one of our ways to acknowledge their hard work and efforts towards building Sunstone. The youngest member of Sunstone who got benefited is of 26 years of age and we want all our employees to grow with the organisation,” Ashish Munjal, cofounder and CEO, Sunstone said.

The company has partnered with over 40 academic institutions and has a presence in over 35 cities in India.

So far, it has raised a total of $67.7 Mn from various investors. Its cap table includes Saama Capital, Work10m fund, Ashish Gupta, Pankaj Bansal, Prime Venture Partners, Rajul Garg, and Purvi Capital, among others.

In India, its competitors are edtech giants such as UpGrad, BYJU’S, and Unacademy.

The ESOP announcement has come at a time when the country’s edtech sector is marred by the funding winter. Post the pandemic years, edtech giants and startups lost their sheen and are currently struggling to keep their business afloat.

Earlier this month, Inc42 reported edtech startup LEAD sacked about 60 employees from its tech and product teams.

Since January 2022, edtech startups have laid off over 8,000 employees in the country, as per Inc42 layoff tracker.