Online freight aggregator BlackBuck buys back some ESOPs from employees
New Delhi: Online freight aggregator BlackBuck Tuesday said it has bought back some of the stock options held by its employees.
Thirty-five out of the 60 employees who were eligible sold the stock options back to the company, BlackBuck’s human resources head Shilpi Pandey told Mint.
The company has 985 staffers across functions such as technology and product, supply management and business development, apart from 200 more contract workers.
The company did not reveal how much it spent on the buyback.
Equity-linked stock options, or ESOPs, are offered to senior employees as part of their compensation. These can be converted to company stock after a fixed period, or liquidated during a buyback offer or sold when the company goes public.
The announcement comes weeks after Flipkart’s board approved a $100 million ESOP repurchase plan. The Economic Times reported on 3 October the scheme could cover close to 6,000 employees. Earlier in November 2015, Flipkart had sold $27-30 million worth of stock in its employee trust fund to provide liquidity to ESOP holders.
“The philosophy behind this move was to create an opportunity for employees to share the success of the organization. Typically, the benefit of ESOPs is given when the company is listed. For any start-up, it is quite a long journey through lot of risks… We wanted to create these pit stops where employees really see value of the company during this journey,” BlackBuck’s human resource head Shilpi Pandey told Mint.
The scheme was announced in April, a month after BlackBuck raised its series-C round of $70 million, and the payout was made this month, Pandey said.
Pandey said the stock bought back was returned to the ESOPs pool. Companies usually earmark 10-15% of the company stock for employee stock options.
BlackBuck’s buyback is an uncommon instance for a start-up. Such buybacks are usually made by large companies, often public firms, as a way to use excess cash.
“It is heartening to see an early stage start-up wanting to extend additional benefits to its employees… Within 2 years of operations, BlackBuck has established itself as a strong player which is determined to revolutionize freight. We are delighted to be BlackBuck’s partner in this journey,” said Anand Daniel, a partner at Accel, an investor in the company.
BlackBuck, managed by Bengaluru-based Zinka Logistics Pvt. Ltd, works as an online marketplace for firms offering freight and cargo transportation services and clients.
It has over 125,000 trucks empanelled on the platform, operating in over 300 locations. Currently, it has over 400 customers including SMEs and large corporates.