Share buyback on cards for startups: Meesho, Swiggy put out ESOPs

Indian startups Meesho and Swiggy have separately offered staff employee stock ownership plans (ESOPs) in buyback programmes to reward employees, The Economic Times reported.

Investors in Meesho are looking to buy back shares worth $5 million from employees, and CEO Vidit Aatrey told the paper they want to “reward employees for their contribution” to building the company.

Aatrey said junior most to senior employees will be eligible and will be able to sell up to 100 percent of their ESOP. While he did not disclose the terms of sale, he did say valuation would be “much higher compared to the last round.”

Meesho is valued at $1.2 billion, sources told the paper. Investors in the social commerce startup include new entrants Naspers and Facebook (together raised $125 million), and existing ones, SAIF Partners and Sequoia Capital (valuation of $700 million), it said.

Moneycontrol could not independently verify the report.

Meanwhile, Swiggy is looking at buying back $7 million to $9 million worth of shares, with 40 percent of staff (current and past) are expected to exercise the offer. This would be the company’s second such activity.

“We want to reward our team that has worked relentlessly over the last many months with a meaningful wealth creation opportunity through an ESOP liquidity programme,” Girish Menon, Vice President – HR of Swiggy said. He added that the business is seeing “steady recovery” and the “future looks promising.”

“Over 40 percent of our employees with ESOP benefits will be eligible to exercise their stocks. Some of them will be able to liquidate their ESOPs at three times the premium to the allotted price,” Menon said.

Menon said investors include high net worth individuals (HNIs), but did not give names.