Blackstone-backed Simplilearn completes first ever ESOP buyback
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Simplilearn Solutions Pvt. Ltd, which provides a training destination for professional certification courses, has completed its first-ever employee stock ownership plan (ESOP) buyback worth Rs 48.74 crore, Krishna Kumar, Co-founder and Chief Executive Officer (CEO) of the edtech firm told VCCircle in an interview.  

The buyback was undertaken as part of the recent investment by Blackstone in Simplilearn, that paved the way for its early investors such as Kalaari Capital and Mayfield to exit.

“We offered our employees this buyback at the same price that Blackstone bought shares from our investors, that is Rs 63,500 per share,” said Kumar. 

The company had offered active employees to liquidate up to 25% of their vested ESOPs as part of this buyback and 65% of them exercised their options.

The company also rewarded all these employees with additional new ESOPs.    

Kumar also said that while he had to option to liquidate 25% of his ESOP, he did not exercise the option now.

"The message we are trying to give to the employees is that the current share price will be worth more. The internal projection is that it will be 10x in the next four to five years," said Kumar.  

Over 60% of Simplilearn’s business currently comes from international markets. The company said it is on an aggressive growth path and is further strengthening its global team. With employee wealth creation as a key part of the people strategy, Simplilearn is hiring leaders across all levels in the Indian and the US markets.    

Kumar said one of the reasons why they disclosed the buyback was because of the hiring it is undertaking as ESOPs is one of the ways to help attract great talent. The firm has recently added Deborah Quazzo, managing partner at GSV Ventures to the company’s board of directors and appointed Saurabh Arya as the Vice President- Simplilearn Enterprise.

Simplilearn was founded in 2010 by Krishna Kumar, a graduate in electronics and communication engineering from the National Institute of Technology, Karnataka.     

The platform offers over 100 programmes to help early to mid-career professionals acquire new-age digital skills across cloud, DevOps, data science, artificial intelligence (AI) and machine learning (ML), digital marketing, cyber security and many more.

Based in San Francisco, California and Bangalore, the ed-tech firm claims to have helped over two million professionals, and companies in over 150 countries get trained, acquire certifications and upskill their employees.    

The company is currently collaborating with renowned educational institutes such as Caltech CTME, MIT Schwarzman College of Computing, UMass Amherst and the Isenberg School of Management, Purdue Online, Jagdish Sheth School of Management and IIT Kanpur and companies such as IBM, Microsoft, Amazon, Facebook and KPMG.     

In July, Blackstone acquired a controlling stake in Simplilearn.  According to a VCCircle analysis, Kalaari Capital, Helion Ventures, and Mayfield, which held an aggregate stake of close to 57% in a 3:2:1 ratio going by a person, took home about Rs 885 crore, Rs 590 crore and Rs 295 crore.    

Over the last few weeks, several venture capital-backed startups including Walmart-owned digital payments platform PhonePe; edtech start-up Teachmint Technologies Pvt Ltd; FMO-backed fintech firm Innoviti Payment Solutions; social ecommerce platform Meesho and PB Fintech Ltd, the owner of online platform Policybazaar and Paisabazaar; among others have launched their ESOP programmes.     

Firms typically offer ESOPs to attract and retain talent.In some cases, it is estimated that ESOPs make up as much as 60-70% of the compensation packages of top-level executives.      

This year has witnessed many companies allowing their staff to liquidate their employee stock ownership plan (ESOP).    

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