Facebook-backed social commerce startup Meesho said on Thursday that it has allowed some of its employees to sell their shares in the company in an employee stock ownership plan (ESOP) buyback, becoming the latest growth-stage firm to give its employees a windfall.
“Out of 60 people who were eligible, 20 exercised the option for a collective $1 million ( ₹7 crore), where Naspers acquired the shares," Meesho’s co-founder and CTO Sanjeev Barnwal said in an interview.
Meesho, founded in 2015 by Barnwal and Indian Institute of Technology Delhi batchmate Vidit Aatrey, is a platform that connects manufacturers with resellers, who eventually sell these products to users through social media platforms such as WhatsApp and Facebook. It offers services such as payments and logistics to these resellers, enabling ease of transactions and sales.
About 200 of the company’s 800 employees hold stock options. Some are still waiting for their shares to vest, while “some eligible employees believe in our growth and think it is too early to cash out," Barnwal said. The people who have cashed out have been Meesho employees for 1-4 years.
Meesho is among the growth-stage startups to have rewarded employees with share buybacks in the last few months. Till recently, this has rarely happened even at unicorns or multi-billion dollar firms. However, over the last few months, payments firm Razorpay and business-to-business industrial goods marketplace Moglix have all given employees ESOP exits worth millions of dollars.
Online brokerage Zerodha also announced a ₹200 crore ESOP pool in September last year. Earlier this week, automotive portal CarDekho said it is buying back shares worth $3.5 million ( ₹25 crore), benefitting about a 100 employees. Moglix and Razorpay had both announced ESOP buybacks in November last year. Razorpay’s investors, Ribbit Capital and Sequoia Capital, purchased shares worth $4 million, with 400 employees eligible to participate, while Moglix bought back shares worth ₹5-10 crore from 25 eligible employees.
“With a buyback this early in the stage of business, we want to recognise their efforts, reward them for their contribution in building Meesho and show real value in our ESOPs to existing and potential employees. This buyback from Naspers shows their belief and confidence in Meesho and its mission to create entrepreneurs across the country," Barnwal said.