Innoviti Covers 30% Of Employees Under ESOP, Enhances Pool To $10 Mn

Bengaluru-based digital payments solutions startup Innoviti said on Monday (June 29) that it was enhancing its ESOP pool to $10 Mn. The pool was created as a part of the structuring carried out during the recent Series C fundraise from Netherlands-based FMO-Entrepreneurial Development Bank, along with existing investor US-based Bessemer Venture Partners.

The ESOP scheme, constituted during pre-Series A, is open to all full-time employees of the company and is awarded based on performance and loyalty. With the enhancement,  more than 30% of all employees are now covered.

“As a startup our team members fight against several odds to create successes. It is a difficult journey and it’s moving to see how some people relentlessly drive this fight, dedicating their time, often way beyond office hours, to leap over hurdles and create phenomenal successes. ESOPs are a small token to make those victories that much sweeter,” said Rajeev Agrawal, CEO, Innoviti.

Recently, Paytm widened its ESOPs pool by rewarding high-performing employees and new hires with employee stock option plans (ESOPs) worth INR 250 Cr. “Paytm has a high-performance culture and follows a transparent process to evaluate and reward employees. We always ensure to provide ample growth opportunities and engage for feedback from time to time,” said Rohit Thakur, chief human resources officer at Paytm.

Post-pandemic, some of India’s top startups, including OYO Hotels & Homes, Zomato and Grofers, have expanded their employee stock ownership plan pools, handing out more such stock to furloughed employees or those whose pay have been cut during the ongoing economic crisis wrought by the Covid-19 pandemic.

Grofers has almost doubled its ESOP pool to over 11%, up from 6% in late 2018, the company said. Hospitality chain OYO has also increased employee ownership of the SoftBank-backed company. 

Recently, the ministry of corporate affairs (MCA) announced the Companies (Share Capital and Debenture) Amendment Rules of 2020, under which the government has extended the employee stock ownership plans (ESOPs), changed definition of startups and also made some regulatory changes in share capital requirement.

Under the latest amendment, the ministry of corporate affairs has also notified that startups can now offer sweat equity of up to 15% of their paid-up share capital. Besides this, the ministry has decided to change the definition of startups to be in-line with the definition used by the Department for Promotion of Industry and Internal Trade (DPIIT) since last year. Under the new MCA definition, startups can now issue employees stock options for up to 10 years from their incorporation instead of five.

Founded in 2002, Innoviti deploys point of sale (PoS) terminals and processes card payments for retailers. It claims to have turned its core enterprise business of processing card payments for organised retailers cash positive. According to its website, the company processes around 150 Mn transactions annually and it claims to have around 16 patents to its name.

Overall, it claims to process over $6.5 Bn gross payments volume annually through its terminal and has deployed more than 80K terminals across 20K shops. The company claims to process over INR 40K Cr of payment transactions, which makes up for 6% of all offline merchant payment transactions in India. This also includes INR 1,500 Cr of transactions involving the distribution of loans to consumers and small businesses.

Innoviti caters to restaurants, educational institutes, fashion and lifestyle brands, retail brands, entertainment companies, tour and travel companies, healthcare providers and other businesses that require PoS services. It plans to offer other tech tools in the near future to merchants to help digitise their business. To ease customer acquisition, Innoviti said it would leverage wholesale distribution channels to sign up merchants.

Innoviti’s biggest rival in the payment processing domain is Pine Labs. In 2019, Innoviti had filed a patent infringement suit against Pine Labs on the payments processing technology that enables UPI payments at retail POS terminals. Besides this, the company also competes with other digital payments facilitators such as Paytm, PhonePe, Google Pay and others.