Urban Company Unveils Fifth ESOP Sale Prog Worth INR 203 Cr

Hyperlocal services startup Urban Company has announced its fifth employee stock ownership plan (ESOP) sale programme worth INR 203 Cr. 

Urban Company claims it to be its largest employee stock secondary sale, which marked the participation of 446 employees. The sale will allow the company’s current and former employees to liquidate their vested stocks.

The company’s existing investors Vy Capital, Prosus, along with Dharana Capital will be purchasing these shares.

So far, Urban Company has granted ESOPs to 1,593 employees and ex-employees and of these 784 employees and ex-employees have participated in five secondary ESOP sale programmes, liquidating ESOPs worth INR 306 Cr across these programmes.

“To date, the company has awarded 11% of its current fully diluted cap table as ESOPs, encompassing vested, unvested, and sold ESOPs,” the company said in a statement. 

“While ESOPs are awarded in a broad-based fashion across mid-to-senior level employees, the quantum is skewed towards critical roles and high-performing team members. Apart from the initial ESOP grant at the time of joining, our team members also get refresh grants based on performance. We have actively pursued secondary sales opportunities for our team members, to establish ESOPs as a credible wealth creation asset,” said Raghav Chandra, cofounder and CPTO, Urban Company.

It introduced its first ESOP sale in 2017, offering shares worth 1.9 Cr. This was followed by successive ESOP sales worth 42 Cr in 2019, 125 Cr in 2020 and 181 Cr in 2021. 

This comes at a time when the company is reportedly expecting its UAE operations to turn profitable soon. 

Urban Company reported a 40% year-on-year reduction in net loss, decreasing to INR 308 Cr in FY23 from INR 514 Cr in the previous fiscal year, on the back of a major streamlining initiative that faced protests from gig workers over alleged unfair employment practices.

Founded in 2014 by Bahl, Raghav Chandra, and Varun Khaitan, Urban Company provides doorstep services such as home cleaning, appliance repair, salon and massage treatments and painting.

It is pertinent to note that the company is yet to issue its FY24 financial results. Meanwhile, there is significant interest in the company’s performance for the fiscal year as the company have reduced costs and postponed expansion plans due to limited capital availability.

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