Fintech startup Nuclei issues stock appreciation rights for employees worth 25 pc of its valuation

Bengaluru-based fintech startup Nucleihas issued Stock Appreciation Rights (SARs) for its employees. With this, 25 percent of the company will now be owned by its employees. 

Distributed among 60 of its employees (of the total 85), these stocks are worth Rs 25 crore considering the current valuation for the company stands at Rs 100 crore, founder Ankur Joshi tells YourStory Media in an exclusive interaction.

“In a business, there are teams, clients, and stakeholders. We don’t want the stakeholders and team to be different from each other. That’s why we want to give stake to the team. We aim to just focus on the team, which can become more than capable to take care of the clients,” he adds.

Of late, investors and analysts have been suggesting startups adopt SARs route instead of ESOPs. Earlier, companies like BookMyShow, Jupiter Money, and Infibeam Avenues also issued SARs to their employees.

ESARs are essentially contracts that are signed between the employee and the company, unlike ESOPs where employees have to purchase stocks at an exercise price in cash.

Although on the practical front, there is not much difference between the two, lesser compliance and documentation is required in the case of ESARs as compared to ESOPs. Also, ESARs provide everyone participate in the upside as the company grows in valuation.

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Founded in September 2018, Nuclei is a bootstrapped merchant marketplace platform that claims to “inject the tech DNA for banks”. The platform has third party merchants and service providers, which can be integrated with the bank’s mobile app.

The startup enables banks to directly cater to their customers to avail services like flight booking, credit report generation, mobile recharge, and buy digital gold.

The end customers can transact directly through a bank’s payment instrument like a savings account and credit card without being directed to third party payment services. In 2020, Nuclei was a part of YourStory’s Tech30 cohort. 

At present, it offers four key products and works with 18 major banks across India, Southeast Asia, and the UAE. It has been empowering banks like SBI, ICICI, Canara Bank, IndusInd Bank, RAKBANK, among others. 

When asked about the plans to raise external funding round, Ankur shares that most banks pay in advance helping them to continue paying the salaries and once the product is built, cash flow generates thereafter, thus, ensuring that they do not have to go through an external funding round. 

As the numbers tell, the startup declared a profit of Rs 2 crore last year and is looking to reach Rs 10 crores in the current financial year. It looks to add 60 more banks in the next two years across Kuwait, Saudi Arabia, Bahrain, Oman, Malaysia, Vietnam, Singapore, Indonesia and more.

“We are not looking to exit in the next 3-4 years. This is my fourth company and this time, I am looking to stay, run this company for the rest of my life. That’s the idea with which we are approaching each and every decision whether it is in terms of products, hiring or clients,” says Ankur.