Razorpay announces USD 10 million ESOP sale for 750 current, ex-employees

NEW DELHI: Fintech major Razorpay on Thursday announced its third ESOP (Employee Stock Ownership Plan) buyback programme worth USD 10 million (about Rs 73 crore) that will benefit 750 current and former employees of the company.

A statement said that Sequoia Capital India and GIC, two of Razorpay's key investors, will be the buyers involved in this process. Existing and former employees of Razorpay, who hold vested stocks, will be eligible to sell up to 33 per cent of their vested ESOP shares during the round, it added.

ESOP buybacks in the startup industry have been a source of significant wealth creation for employees. Razorpay has facilitated an ESOP buyback programme consequently for the last three financial years. Razorpay, which has a current employee base of 1,350 people, had raised USD 100 million in series D funding in October last year.

The round valued the company at USD 1 billion. "We've always said and believed that our employees are the reason for every success that we have had...And this ESOP buyback is our little way of giving back to the employees for their contribution and a form of wealth creation for all, as it is important for us to ensure that our employees also grow along with the company," Razorpay CEO and co-founder Harshil Mathur said.

He added that the compensation will be rolled out to all eligible employees, including administrative staff. Razorpay's first liquidity event through ESOP encashment was in November 2018 for its 140 employees then. The USD 2 million ESOP transaction was done at a 50 per cent premium to the valuation. The second ESOP sale event occurred in November 2019, during which about 400 employees were eligible.

To date, the company has awarded ESOPs to 1,000 employees, with current employees holding a majority share. Razorpay has seen significant growth even during the pandemic-hit year. The company has hired over 550 employees in 2020 and has recently announced plans of recruiting another 650 employees across engineering, product, customer experience, sales and marketing roles this year.

The company powers online payments for more than 5 million small and large businesses including Facebook, IRCTC, CRED, Zerodha and Indigo among others. It has been clocking 40-45 per cent month-on-month growth and aims to increase its merchant count to 10 million by next year.

Razorpay registered 3X growth in payment volume through small and medium businesses that went online for the first time during COVID in 2020.