Freecharge Co-founder Kunal Shah’s credit card bill payment app CRED has completed its initially ESOP buyback programme from current and former personnel. The buyback was initiated throughout its $81 million Series C round of funding raised back in November 2020, from its current investors DST Global, which had led the round, along with Sequoia Capital, Ribbit Capital, Tiger Global, and General Catalyst. Sofina, Coatue, and Satyan Gajwani of Times Internet had also participated in the round that valued CRED at a post-funds valuation of $806 million. According to the organization, the personnel had liquidated their ESOPs collectively worth Rs 9 crore.
“The ESOP buyback was completed on Jan 01, 2021. This is the first ESOP liquidity program initiated by CRED, just two years into its operations. Employees who hold vested stocks were eligible to sell up to 50 per cent of their vested ESOP shares in the company,” CRED stated in a statement. “Due to Covid-19, startups have realised that one way to keep the high performing employees interested and engaged is to ensure that there is sharing of the wealth with such employees. So those who have vested shares have been given an option to participate in the buyback process,” Souvik Ganguly, Managing Partner, Acuity Law had told TheSpuzz Online.
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ESOPs are becoming employed by enterprises across the planet to encourage personnel to purchase shares and personal a portion of the organization in order to guarantee a sense of ownership amongst them. The ESOP buyback trend possibly started back in 2018 when Flipkart had announced a one hundred per cent buyback solution of vested ESOPs. In the previous couple of months, a handful of startups such as such as Cars24, Meesho, Zerodha, Unacademy, Swiggy, Razorpay, CarDekho, BharatPe, OYO, Byju’s, and more had launched such ESOP liquidity delivers for personnel.
“We are committed to enabling wealth-creation opportunities for them and have allocated 10 per cent of our cap table allocated for ESOPs even at the Series C stage,” stated Kunal Shah, Founder, CRED. The organization claimed development to more than 5.9 million ‘high-trust individuals’ with a median credit score of 830 when processing India’s 20 per cent of all credit card bill payments. The startup had raised $255.5 million in 5 funding rounds so far, as per Crunchbase. India’s credit card user base had reached 47 million in 2019 and is probably to develop at a CAGR of more than 25 per cent throughout the 2020-2025 period on the back of the increasing recognition of credit cards and the increasing trend of acquiring goods initially and paying later, according to TechSci Research. While the market place is smaller sized in comparison to the debit card, on the other hand, it is anticipated to see a important rise in the coming years.