Sequoia and YC-backed Razorpay offers ESOP buyback for existing and former employees
Bengaluru-based Razorpay, an online payments solution provider announced on Wednesday the implementation of the second ESOP buyback plan for its existing and former employees. These employees who hold vested stocks will be eligible to sell up to 30 percent of their vested ESOP shares of the company. Sequoia India and Ribbit Capital, two of Razorpay’s key investors will buy the shares at a premium.
In a press release, Harshil Mathur, CEO and Co-Founder of Razorpay, said,
"At Razorpay, it is important for us to ensure that our employees also grow along with the company, and the ESOP buyback model is a form of wealth creation for all the employees... By encouraging all our former and existing team members to participate in this plan, it’s our small gesture of giving back to the people who have trusted us in this journey. Over 400 employees, as young as 23, will be eligible to participate."
In June 2019, Razorpay raised $75 million as part of its Series C funding, led by new investors Ribbit Capital and Sequoia India, along with existing investors Tiger Global Management and Y Combinator.
While ESOP buybacks have been part of employee welfare in larger organisations, the startup industry particularly in India, has started to see these developments only recently. This depicts the healthy growth the startup ecosystem has been witnessing.
Last year, Razorpay registered a growth of 500 percent and has been growing at a rate of 35 percent monthly. At present, the startup powers digital payments for over 600,000 businesses like Indian Railway Catering and Tourism Corporation (IRCTC), Airtel, BookMyShow, Zomato, Swiggy, Yatra, and Zerodha, among others, and plans to increase this to 10 lakh by 2020. This converged payments solution company expects a 5x growth in its revenue by the end of the next fiscal year.
Additionally, B2B industrial goods marketplace - Moglix, has also purchased stocks worth Rs 5 crore to Rs 10 crore from about 25 of its employees.
(Edited by Suman Singh)