Udaan extends ESOPs to all staff, removes 1-year cliff clause for vesting

B2B e-commerce start-up Udaan has announced that employee stock option plans (ESOPs) will be extended to all its employees and the ‘cliff’ vesting clause of ESOPs will be removed.

All future ESOP allocations at Udaan will vest every quarter. The one year ‘cliff’ period is a widely prevalent industry practice that requires employees to wait for one year for their ESOPs to start vesting. Udaan has done away with this waiting period.

As a part of the revamp, the company also announced that every employee at Udaan, regardless of their tenure or job profile will be allotted ESOPs under their annual performance cycle. Further, these ESOPs will vest at a quarterly frequency and be completely vested within a two-year period - twice as fast as the industry norm of four years.

Following these changes, the overall number of ESOP holders in the company has jumped 400 per cent and now covers 100 per cent of its employees.

Meenakshi Priyam, group CHRO, Udaan, said, “People trust companies with their careers. We felt that the practice of granting ESOPs with a one-year cliff doesn’t reciprocate this trust. As a progressive employer, we have decided to take the lead in balancing the scales in employer-employee relationships in the industry and revamped our ESOP policy. We want to treat all our employees as responsible adults and as equal partners.”

“We made these changes to preserve and strengthen the culture of shared entrepreneurship at udaan. Our annual ESOP programme creates a pathway for each and every employee to earn ownership in the company through their contributions and commitment,” she added.

Udaan was ranked second in LinkedIn’s Top Startups List for the year 2021. The survey looked at LinkedIn data across four pillars – employee growth; jobseeker interest; member engagement with the company and its employees; and how well the featured startups attracted talent from the LinkedIn Top Companies list.

Earlier this year, the start-up raised a total of $250 million through convertible notes and debt funding to further grow and capitalize on the enormous growth opportunity that the Indian eCommerce market offers. The company has invested more than Rs 4,000 crore in the past 12-18 months across different pillars of business - people, technology, supply chain, category, credit, compliance - to accelerate and strengthen capabilities to serve its customers better. The company has also undertaken various initiatives to enhance overall customer experience.

Over the last five years Udaan has built the e-commerce ecosystem with a network of over 3 million registered users and 25-30,000 sellers across more than 1,000 cities in the country covering over 12,000 pin codes.

The platform claims to have over 3 million kirana shops, retailers, chemists, HoReCa, farmers, etc. doing over five million transactions per month. The company also operates a large logistics network with over 200 warehouses spread over 10 million sq feet space across the country delivering over 8,000 tons of products every day. It plans to scale its warehouse capacity to 50 million square feet across the country in the next 7-8 years.