SUMMARY
ESOP pool capped at 10% of the startup’s valuation
The startup says targeting growth of 20X in the coming three years
Hero Vired has underlined its plan for an IPO in the next 5-6 years
Hero Vired, the edtech firm of the Hero Group, has announced an ESOP monetisation scheme for its faculty.
Under the program, all full-time faculty members and teaching assistants – who have completed six months with the startup, will be eligible for the buyback scheme.
The program will also be extended to new faculty members as and when they meet the stipulated requirements.
The total ESOP pool has been capped at 10% of the total valuation of the startup. A total of 10 full-time faculties have collectively been granted ESOPs worth around INR 50 Lakhs. The startup expects this number to hit INR 10 Cr in the coming 3-4 years.
Hero Vired plans to grant fresh ESOPs every year, depending on the financial performance of the startup. In addition to this, the startup is also planning a partial buyback or secondary exit in the next 3-5 years.
The edtech company has also underlined its plan for an IPO in the next 5-6 years.
Founded in April 2021 by Akshay Munjal, Hero Vired is a New Delhi-based edtech platform for professionals and higher education aspirants. The startup is a venture of the Hero Group that offers programs in collaboration with universities across the globe.
The startup currently has over 66 faculty members in its team and it plans to add 50 more by March this year.
Hero Vired CEO and founder, Akshay Munjal said, “The faculty ESOPs program is our way of thanking our faculty and ensuring wealth creation for them. As a learning company focused on live instructor-led sessions, our teaching staff is the backbone of our business. Our ESOPs program is our dynamic approach to attracting, rewarding, and retaining top talent.”
Munjal also told Inc42 that the startup would expand the ESOP scheme to regular employees in the coming future.
Speaking exclusively to Inc42, Munjal also said that the employee stocks could hit a 20X valuation in three years. He further added that, “The startup was clocking a revenue of INR 5 Cr per month, exhibiting 25-30% Month-on-Month growth.”
The edtech startup claims to be “touch heavy” and is currently focusing on content to attract more users to the platform. Hero Vired has also highlighted the quality of partners and faculty members as a key differentiating factor in the already crowded edtech space.
In a chat with Inc42, Akshay Munjal said that the startup plans to bring in a partner to add value to the startup. He said that the partner would likely be from the edtech domain which will enable the startup to scale faster in the highly competitive Indian edtech space.
On the question of future trends in the edtech sector, Munjal told Inc42 that consolidation was the way forward. He said, “Having a plethora of players in this crowded space is just not sustainable and in the near future, one could see mega consolidation with barely 10-15 players in the entire arena. The market will eventually become specialised with specific startups catering to specific segments.”
Earlier in July last year, Bengaluru-based edtech startup Unacademy had announced a first-of-its-kind stock options worth $40 Mn for teachers on its platform. This was followed by the announcement of its largest ESOPs buyback programme worth $10.5 Mn for employees and teachers in September of 2021.
The Indian edtech ecosystem wrapped up 2021 on a high note and emerged as the third most-funded sector last year. In total, startups raised $4.7 Bn in 165 deals. Add to this, BYJUS alone raised about $1.9 Bn during the course of the year
Three new edtech unicorns were also minted in 2021, namely Eduditus, upGrad and Vedantu.
2022 also seems to be going well for the sector. On February 15, Info Edge acquired a 25% stake in Gurugram-based edtech startup Juno Learning for INR 11.25 Cr. A week ago, Goa-based edtech startup BrightChamps acquired another edtech startup Education10x. This was preceded by Odisha-based edtech startup LectureNotes acquiring Kolkata-based CollegeShala for an undisclosed amount last month. India also got a new edtech uniocrn in January 2022 with LEAD entering the coveted club.
Overall, the outlook seems positive for the sector and this ESOP announcement by Hero Vired only adds to the excitement. With more growth on the horizon, the Indian edtech startup ecosystem is all geared for its next stage of evolution.
