Paytm and founder, entrepreneur Vijay Shekhar Sharma's meteoric rise is what perhaps, dreams are made of. Continuing that commendable rise, the company has recently reached a valuation of USD 10 billion. This recent valuation has come after a secondary sale where some current and former employees were given an opportunity to sale their ESOPs. Two hundred employees liquidated their ESOPs for USD 50 million.
ESOPs are employee stock ownership plan, a kind of employee benefit plan that encourages staffers to acquire stocks or ownership of the company.
Last year, Paytm raised USD 1.4 billion from Japanese investor, SoftBank taking its valuation to USD 7 billion. The new valuation is, however, a significant jump from last year. In the latest round, hedge fund, Discovery Capital bought shares from One97 Communications, Paytm's parent company.
According to reports Paytm calculates the eligibility for ESOPs based on the employee's contribution to the firm, long-term potential and duration of employment. "These employees, most of who have been with the company since inception, have benefitted," the company said.
In December last year, e-commerce giant Flipkart had also completed a buyback of ESOPs worth Rs 6.5 billion. Paytm is currently the second most valuable internet firm in India after Flipkart, which has a valuation of USD 12 billion.
SoftBank is a an investor for both Paytm and Flipkart.
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