Meesho enables ESOP buyback for 20 employees
2 min read . Updated: 13 Feb 2020, 04:05 PM IST- Out of 60 people who were eligible, 20 exercised the option
- Meesho is also social media giant Facebook’s first direct investment in the country
MUMBAI : Social commerce startup Meesho on Thursday said it enabled certain employees to sell their shares in the company in an Employee Stock Option Plan (ESOP) buyback, becoming the latest in a series of growth stage firms which have given certain employees a windfall in cash.
“Out of 60 people who were eligible, about 20 people exercised the option for a collective $1 million ( ₹7 crore), where Naspers acquired the shares," Meesho’s co-founder and CEO Sanjeev Barnwal told Mint in an interview.
Founded in 2015 by IIT Delhi batchmates Vidit Aatrey and Sanjeev Barnwal, Meesho is a platform that connects manufacturers with re-sellers, who eventually sell these products to users through social media platforms such as WhatsApp and Facebook.
Meesho offers services such as payments and logistics to these re-sellers which enables ease of transactions and sales.
Out of the company’s 800 employees, about 200 hold stock options. Some "eligible employees believe in our growth and think it is too early to cash out".
The people who have cashed out from the buyback have been Meesho employees for one-four years, indicating that some newer employees cashed out as well.
Meesho is also among a series of growth stage startups to have rewarded employees with share buybacks in the last few months. While so far these happened rarely even at unicorns or multi-billion dollar firms, over the last few months, payments firm Razorpay and business-to-business industrial goods marketplace Moglix have all given early employees ESOP exits worth millions of dollars. Online brokerage Zerodha too announced a ₹200 crore ESOP pool in September last year.
Earlier this week, automotive portal CarDekho said it is buying back shares worth $3.5 million ( ₹25 crore), benefitting about a 100 employees. Moglix and Razorpay had both announced ESOP buybacks in November last year. Razorpay’s investors -- Ribbit Capital and Sequoia Capital-- purchased shares worth $4 million, with 400 employees eligible to participate, while Moglix bought back shares worth 5-10 crore from about 25 eligible employees.
“With a buyback this early in the stage of business, we want to recognise their efforts, reward them for their contribution in building Meesho and show real value in our ESOPs to existing and potential employees. This buyback from Naspers shows their belief and confidence in Meesho and its mission to create entrepreneurs across the country," CTO Barnwal said.
Meesho was valued at $600 million in August when South African media conglomerate Naspers (now known as Prosus Ventures) led a $125 million equity funding round in the firm.
Meesho is also social media giant Facebook’s first direct investment in the country. Other companies in this space include Mumbai-based Shop101 and Bengaluru-based GlowRoad. Shop101 last raised $11 million from Kalaari Capital and Unilever Ventures in December. GlowRoad raised $10 million in April in a round led by China’s CDH along with participation from existing investor Accel Partners.
RELATED STORIES
