Sep 1, 2022
Decoding Liquidity Programs for Private Markets with Skanda Jayaraman, CEO of Qapita Marketplace
Welcome to this special edition of Fables Of ESOP. In this we seek to deconstruct the basics of liquidity programs for you.
Welcome to the September edition of Fables of ESOP. While the slowdown in liquidity programs persists, companies continue to announce pool expansions or other equity incentives to attract and retain top talent.
In terms of liquidity programs Q3 2022 saw a sharp drop in the liquidity volumes. While Q3 2021 was a record quarter with very large companies such as Flipkart, Upgrad and Unacademy announcing large ESOP Buyback programs, 2022 see the volumes shrink by a factor of over 10! In September, Orange Health and CityMall announce ESOP buybacks post their funding rounds. Let’s do a quick round up for this month!
Orange Health is a leading health-tech start-up building India’s fastest diagnostic lab service. They announced their maiden buyback program worth USD $1M impacting their current and former employees. It marked a significant milestone in its growth journey given that the buyback program was initiated within 2 years of its launch. This comes post the company’s Series B funding of $25 Mn by Bertelsmann India Investments, General Catalyst, Accel, Y Combinator, Good Capital and others.
25 existing and former employees are eligible to participate in this buyback program. With this buyback they aim to recognize contribution of their early employees.
CityMall, a social commerce platform, conducted its first ESOP buyback program of $1.3 Mn in which more than 50 employees across senior management and core team participated.
The company had raised $75 Mn earlier in March, post which it also went through a business model restructuring which resulted in the company cutting down its team strength. Angad Kikla positioned this ESOP liquidity program as a testament to company’s current position and growth prospects.
Since its inception the company has grown 30% MOM and now serves more than a million customers.
Niyo announced its second ESOP buyback plan for most of its employees with a vintage period of over two years and good performance ratings across the last few years. It had recently granted ESOPs worth ₹40 cr in April 2022 as a part of their annual appraisal.
Ninjacart, a B2B agritech, expanded its current pool by 3366 options and has now been increased to 6522 options which is worth $43,5Mn. Apart from this they also have created a separate pool of 4,996 shares for their co-founders. Ninjacart is currently valued at $815Mn.
Digit Insurance recently announced an expansion of its ESAR pool by adding 57,02,272 ESARs and is now worth $145Mn. Digit Insurance does seek to list through an IPO in the future. However, recently SEBI had put it’s IPO application on hold.
Soothe Healthcare is a homegrown personal hygiene company and has expanded its ESOP pool size by 700,000 options and now is worth $1.1 Mn.
Nandu’s, India’s largest hyperlocal and omnichannel meat retail brand announced its maiden ESOP plan covering employees at all levels. Bootstrapped since inception, Nandu’s structured an ESOP plan to reward employees for their contributions towards the company’s growth in these challenging times.
Narendra K Pasuparthy — Chief Farmer, CEO, and Founder, Nandu’s said,
“It has been our cherished dream to recognize and reward our employees through ESOP for their hard work and long-term commitment to Nandu’s. We already have several company policies in place to ensure a healthy and happy environment for our people. We hope that this will be yet another additional factor to motivate and retain employees as well as attract fresh talent into the company.”
Amidst this funding winter, we continue to see companies revamping their policies to make them more employee friendly in order to attract new talent.
Post our announcement of coming together with ESOP Direct to become the market leader in offering equity compensation (ESOP) solutions in India and SEA, we spoke with Harshu Ghate, MD & Co-Founder of ESOP Direct as well as Ravi Ravulaparthi, Co-Founder and CEO of Qapita over a fireside chat as part of our FablesOfESOP Podcast.
We discussed Harshu’s and Ravi’s journeys in building solutions to democratise Equity compensation (ESOPs) in India and SEA. We also touched upon the future plans as we seek to build this together.
I really enjoyed this candid chat and we covered several points:
👉 How was ESOP Direct conceptualised back in early 2000s?
👉 Evolution of ESOPs as a compensation tool over time and how has ESOP Direct played a positive role in the ecosystem with advocacy, knowledge and technology
👉 How is Qapita looking to build rails for the private markets and offer access, efficiency and liquidity to stakeholders.
👉 If salary has a payslip, why not Equity? #EquityPaySlip
👉 How are the two organisations are building on their synergies towards 𝑴𝒂𝒌𝒊𝒏𝒈 𝒆𝒗𝒆𝒓𝒚 𝑬𝒒𝒖𝒊𝒕𝒚 𝑶𝒘𝒏𝒆𝒓 𝑪𝒐𝒖𝒏𝒕.
Do watch the full video:
We couldn’t be more excited about building this together! 🚀
Are you looking to set up an ESOP Plan or do you wish to review your current plan to make it friendly to employees in order to attract the best talent? We at Qapita can help you. Explore ESOP Advisory services.
Stay tuned to Fables Of ESOP.
Connect with me: srikanth@qapitacorp.com; LinkedIn; Twitter
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