scorecardresearch
Urban Company announces $5 million-ESOP sale programme

Urban Company announces $5 million-ESOP sale programme

The move comes at a time when many startups have had to resort to layoffs or furloughs as business was impacted significantly by the COVID-19 pandemic-led lockdown

The latest sale values each ESOP at Rs 1.10 lakh, which is the same price as the Series E secondary transaction which took place in June 2019, Urban Company said The latest sale values each ESOP at Rs 1.10 lakh, which is the same price as the Series E secondary transaction which took place in June 2019, Urban Company said

Home services marketplace Urban Company (formerly UrbanClap) on Tuesday announced an employee stock sale programme - its third and largest to date - worth $5 million (Rs 37.5 crore). Under the latest programme, more than 180 employees would be eligible for liquidating their vested employee stock options (ESOPs) that would be purchased through a secondary transaction by existing investor, Vy Capital, a statement said.

"This is our third and largest ESOP sale event, and re-affirms our commitment towards creating a world-class ESOP programme," Urban Company co-founder Abhiraj Singh Bhal said. Urban Company's ESOP programme has terms such as an exercise price of Re 1, accelerated vesting, a flat 4-year vesting schedule (25 percent each year) and an infinite hold period to exercise the ESOPs after the employee leaves the company, he added.

According to Bhal, about 450 employees or 40 percent of the company's full time staff have ESOPs - from customer service representatives to its senior vice presidents. The move comes at a time when many startups have had to resort to layoffs or furloughs as business was impacted significantly by the COVID-19 pandemic-led lockdown.

Also read: COVID-19 crisis: Credit Suisse to close 37 bank branches in Switzerland

The latest sale values each ESOP at Rs 1.10 lakh, which is the same price as the Series E secondary transaction which took place in June 2019, Urban Company said. Urban Company's first ESOP sale event occurred in June 2017, coinciding with the Series C round of funding and valued each ESOP at Rs 24,500. During this $1 million ESOP sale, about 25 employees were eligible.

The second ESOP sale event ($2.5 million) was held in December 2018, valuing each ESOP at Rs 61,864. This coincided with the Series D round of funding, during which about 100 employees were eligible. To date, the company has awarded ESOPs to 670 employees, including 450 current employees.

Urban Company awards ESOPs to employees at the time of recruitment, during an appraisal cycle, and as part of various internal recognition programmes.

Also read: RBI banks on startups for employment generation, economic growth