Razorpay announces ESOP sale of $10 Mn for 750 current and former employees
FinTech unicorn Razorpay announced its third ESOP (Employee Stock Ownership Plan) Buyback program worth $10Mn (INR 73 Crore) for its 750 employees. All existing and former employees of Razorpay who hold vested stocks will be eligible to sell up to 33% of their vested ESOP shares. Sequoia Capital India and GIC, two of Razorpay’s key investors will be the buyers involved in this development.
Commenting on announcing its third ESOP Buyback for employee welfare, Harshil Mathur, CEO and Co-Founder, Razorpay, said, “We’ve always said and believed that our employees are the reason for every success that we have had. They turned an unprecedented year into one of the strongest years for Razorpay. And this ESOP Buyback is our little way of giving back to the employees for their contribution and a form of wealth creation for all, as it is important for us to ensure that our employees also grow along with the company."
Harshil further added that current and former employees, even as young as 23, will be eligible for this incentive, irrespective of ranks. The compensation will be rolled out to all employees, be it software engineers, product managers, customer experience agents, or administrative staff.
Razorpay was one of the very few early-stage companies when its first liquidity event through ESOP encashment occurred in November 2018 for its 140 employees then. The transaction was done at a 50% premium to the valuation. The second ESOP sale event occurred in November 2019, during which approximately 400 employees were eligible. To date, the company has awarded ESOPs to 1000 employees, with current employees holding a majority share.
The current share sale is expected to benefit employees across roles - from team leaders to support executives to administrative staff. The firm had raised a $100Mn Series-D funding in October last year.
ESOP Buybacks in the startup industry have been a source of significant wealth creation for employees. Given the fact that it’s Razorpay’s third ESOP Buyback plan, it is a reflection of the faith that the company and its employees have instilled in each other as well as the growing importance of ESOPs in rewarding and recognizing engaged employees.