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Udaan to buy back employee stocks worth Rs. 165-175 Cr

udaan buy back

Online B2B marketplace Udaan will be buying back employee stocks worth Rs 165-175 crore, joining a group of Indian startups that have promoted such liquidity programmes for their staff in the Covid-19 pandemic, which has severely hit the national economy.

In an internal email to all employees, the company stated, “We want to reward our employees who have worked relentlessly over the last many months and years with a meaningful wealth creation opportunity through an employee stock ownership plan (Esop) liquidity offer 2021.”

“All active employees who are not serving their notice period and who have vested stocks as of March 31, 2021, will be eligible,” the collective statement from the company’s founders read.

Udaan joins a clutch of businesses like Cred, Swiggy, Razorpay, Acko, Zerodha, and Browserstack that have carried out Esop buybacks in the past six months to motivate their employees. Companies that have done so in the past three years include BharatPe, Flipkart, Firstcry, Oyo, Cars24, MPL, Unacademy, Moglix, Meesho, Byju’s, CarDekho, and Pharmeasy. Esop buybacks also benefit companies by retaining talent as technology and engineering professionals have been in high demand.

This is a completely secondary transaction; some employees might sell part of their stake to onboard Catamaran. Udaan was last valued at $3.2 billion when it raised $280 million from new and existing investors as an extension of its Series D fundraise in January.

udaan buyback

To date, the company has raised $1.15 billion from a clutch of investors like Tencent, Octahedron Capital, Citi Ventures, Moonstone Capital, Footpath Ventures, Lightspeed Venture Partners, Hillhouse Capital, partners of DST Global, GGV Capital, Altimeter Capital, and others.

Launched in 2016 by three former Flipkart executives, Vaibhav Gupta, Amod Malviya, and Sujeet Kumar, Udaan enables retailers to buy goods from wholesalers and traders across categories including apparel, electronics, pharmacy, staples, fresh food, and FMCG.

It has around three million retailers in 900 cities with about 25,000 sellers across 200 cities selling on its platform as of January. Its competitors include IndiaMart, Amazon Business, JioMart, and Flipkart. The company provides supply chain, lending, payments, and marketing capabilities, allowing retailers to source from big manufacturers and distributors.

In January Udaan said it would, among other things, use the funds to increase its financing capabilities for small businesses and expand its supply chain network.

The pandemic has severely affected the finances of the common man. Udaan’s move to buy back employee stock will help its employees in staying financially secure during these testing times.

Shishir Gupta, Founder and CEO, StartupLanes

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