Fashnear Technologies, which operates social commerce platform Meesho, has announced a $5.5 million (around Rs 40 crore) ESOP programme to buy back the vested stocks from eligible current and former employees.
This is company’s second such programme in less than a year. Meesho announced a buy back earlier in February 2020 where existing investors Naspers bought shares worth $1 million (around Rs 7.4 crore) in which 60% of its eligible employees exercised the option to sell up to 30% of their vested ESOP shares.
In November 2020, Meesho announced the second round of ESOP buyback worth $5 million.
“We continue to see meteoric progress not only as a business but also in our efforts to democratize internet commerce for everyone. Our employees have been at the forefront of driving this momentum, and we want to give them ample opportunities to celebrate and grow with us,” Vidit Aatrey, Founder & CEO, Meesho, said in a statement on Friday.
“As we hire across the board and scale our tech and product talent by 2.5X, ESOPs will give employees high ownership, while providing more opportunities for wealth creation,” he added
“All eligible active employees may sell up to 35% of their vested shares while those who have already quit the organisation, can sell up to 10%. The company has set a cap for each eligible employee at Rs 1 crore”. a person familiar with the ESOP buy back programme told VCCircle on condition of anonymity. The company did not respond to a request for comment on these details.
The share price for the buyback is set at $76.67 (around Rs 5,750) which is set after its Series F round.
Last month, Meesho raised a $570 million Series F from Fidelity Management & Research Company, B Capital Group, and other new and existing investors like Prosus Ventures, SoftBank Vision Fund 2, and Facebook, growing its valuation by 2X to $4.9 billion.
In April, Meesho became a unicorn after it raised $300 million led by Japan’s SoftBank Group Corp. The fund-raise then valued it at $2.1 billion--a three-fold jump from its previous funding round of $125 million in 2019 when it was valued at $700 million. The company said over the last six months, it has seen a 2.8 times growth in monthly transacting users and 2.5 times rise in monthly orders. Meesho now aims to reach 100 million transacting users by December 2022, increase its roster to over 50 million products, and intends to go deeper into India’s underserved markets.
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 package for top-level executives.
This year has seen many companies allow their staff to employee stock ownership plan (ESOP) liquidity events. In August, Bengaluru-based health and fitness platform HealthifyMe announced Rs 90 crore ($12 million) liquidity to almost 100 current and former team members. Many other tech-focused companies like Locus, Moglix, Flipkart, upGrad, Whatfi, and Unacademy have also set up liquidity events this year.