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OYO Announces First ESOP Round Worth About $7 Mn

OYO Announces First ESOP Round Worth About $7 Mn

The board of OYO approved ESOP plan in August

250 employees will be part of the first round

An existing investor will lead the secondary acquisition programme

Hotel aggregator OYO has announced its first Employee Stock Ownership Plan (ESOP) for 250 employees in a secondary share acquisition programme worth $5.7 Mn – $7.1 Mn (INR 40-50 Cr). The ESOP plan is set rollout in January 2019.

In August, the board of OYO approved its ESOP Plan 2018 which was aimed at motivating employees to continuously create value for OYO and enjoy the benefits of the company’s growth. In November, the company added 2,000 stock options to the plan.

Now the company has said that it will implement a multi-year staggered liquidity schedule for its ESOP holders by way of facilitating the secondary sale or through other liquidity

The company is executing the ESOP plans through a secondary acquisition programme led by one of its existing investors. The company expects the total ESOP secondary sale programme to be worth around $150 Mn – $200 Mn over the next few years.

Out of OYO’s more than 10K employees, the eligibility for awarding ESOPs was calculated based on the individual’s role, contribution, and long-term potential, the company said.

Five-year-old Bengaluru-headquartered company has expanded its operations across more than 500 cities of eight countries including India, China, Malaysia, Nepal, UK, UAE and Indonesia. It claims to serve its guests in over 13K franchised and leased hotels, over 3K homes, over 400K rooms.

The company joined unicorn club at a valuation of $5 Bn in 2018 with a $800 Mn funding from SoftBank, $100 Mn from Grab and another $100 Mn commitments from a group of investors.

In India, it also acquired Mumbai-based Weddingz, an online marketplace for wedding venues and vendors; Chennai-based service apartment operator Novascotia Boutique Homes (in March), and IoT technology venture AblePlus (in July). The company also expanded its portfolio to add banqueting and wedding planning services under OYO Auto Party and long-term fully-managed housing rentals under OYO Living.

ESOPs are used to incentivise employees contributions to the startup and reduce attrition rates. Here’s a look at recent ESOP plans announced by Indian startups:

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