Those who have completed four years at the company will be eligible for the buyback, which amounts to 20% of vested shares
This move is prompted by MyGate's improved financial results in the last and current fiscal year
In FY23, the startup reported a net loss of INR 227.1 Cr, which widened more than 30% year-on-year (YoY)
Inc42 Daily Brief
Stay Ahead With Daily News & Analysis on India’s Tech & Startup Economy
Bengaluru-based community and security management startup MyGate, which counts Tiger Global, Acko, Urban Company and xto10X among its investors, has announced an employee stock ownership plan (ESOP) buyback for 51 employees.
However, the company did not disclose the value of the buyback deal.
The buyback plan of 20% of vested shares is for those staff who have completed four years.
This comes on the back of MyGate’s improved financial results in the last and current fiscal year.
“We have emotions of joy, gratitude and excitement as we make this announcement. We are in the strongest financial position that we have ever been and well capitalised to fuel our growth and new initiatives. This is just a small gesture to express thanks and give back to those who have stood with us shoulder to shoulder through ups and downs,” said Abhishek Kumar, cofounder of MyGate, in a LinkedIn post.
In FY23, the startup reported a net loss of INR 227.1 Cr, which widened more than 30% year-on-year (YoY). However, excluding ESOP costs and loss of financial liabilities, MyGate’s loss narrowed 35% to INR 76.43 Cr in FY23.
Founded in 2016 by Vijay Arisetty, Vivaik Bharadwaj, Shreyans Daga, and Kumar, MyGate offers security solutions for apartment complexes at entry and exit gates, replacing security-related systems such as RFID cards and biometrics.
The startup competes against NoBroker’s apartment management platform NoBrokerHood, JioGate and GateKeeper.
Meanwhile, in early 2023, MyGate laid off 30% of its workforce after letting go of a similar percentage of employees in December 2022.
While Indian startups have laid off thousands of employees over the last two years amid the funding winter, ESOP allocations are expected to pick up this year.
Employee stock options or ESOPs have been around for some time now. However, the recent uptick in startups going for ESOP buybacks has brought it under the spotlight.
According to Inc42’s Indian Startup Founder Survey 2023, about 55% of over 400 Indian startup founders are banking on ESOPs to attract talent.
Note: We at Inc42 take our ethics very seriously. More information about it can be found here.