Urban Company has reportedly finished its fourth and possibly the largest ESOP (employee stock options) sale program worth USD 7.3 million (around Rs 55 crores). This move has valued the company at USD 2.8 billion, up from its USD 2.1 billion valuation during a recent funding round this June.
As part of the program, the company sold the ESOPs which were purchased by current institutional investors. While all the vested ESOPs qualified for sale, only 4.4% of the vested ESOPs held by the existing employees, and nearly 10% of the vested ESOPs held by former employees were liquidated through the existing ESOP sale.
Over the last seven years, the home service marketplace has issued ESOPs to 940 current and former employees. Nearly 550 of these 940 employees have vested ESOPs and were qualified to participate in the existing secondary sale program.
The current value of vested ESOPs held by existing employees stands at nearly USD 50.1 million (Rs 380 crores) with the vested alternatives held by ex-employees valued at USD 51.4 million (Rs 390 crores).
Talking about the program, Raghav Chandra, the Co-Founder of Urban Company noted that this is the largest ESOP secondary sale to date. The company has facilitated nearly USD 13.1 million (Rs 100 crores) worth of secondary ESOPs. Chandra added that such liquidation opportunities reinforce the team members’ faith in ESOPs as an instrument in wealth creation.
Urban Company has emphasized on creating an ESOP program that is employee-friendly with features like an exercise price of USD 0.013 (Rs 1), an unlimited hold price, and a linear vesting schedule to exercise the ESOPs after an employee leaves the firm.
The secondary sale comes following the company’s funding round of USD 255 million led by Dragoneer, Wellington Management, and Prosus Ventures earlier in June. Post the funding, Urban Company was exploring plans to scale its services globally, with an aim to enter the South-East Asian and Saudi Arabia markets.