Urban Company valued at $2.8 billion after Esop sale
2 min read 12 Dec 2021, 11:16 PM ISTThe Esops sold were purchased by existing institutional investors, the company said
PremiumBENGALURU : Home services marketplace Urban Company, formerly UrbanClap, has concluded its fourth and largest employee stock option plan (Esop) sale, worth $7.3 million ( ₹55 crore).
This valued the startup at $2.8 billion, up from the $2.1 billion ascribed during a funding round in June.
The Esops sold were purchased by existing institutional investors, the company said on Sunday.
All the vested Esops were eligible for sale. However, only 4.4% of the vested Esops held by current employees and about 10% of those held by former staffers were liquidated through the sale.
Urban Company has issued Esops to 940 current and former employees over the past seven years. Close to 550 of these individuals have vested Esops, and were eligible to participate in the current secondary sale programme, the company said.
The value of vested Esops held by current employees stands at roughly ₹380 crore, with the vested options held by former employees valued at ₹390 crore, according to the company.
“This is our fourth and largest Esop secondary sale we have facilitated till date. Since 2017, we have facilitated Esop secondaries worth approximately ₹100 crore. In our experience, such liquidation opportunities strengthen the faith that team members have in Esops as a wealth-creation instrument," said Raghav Chandra, co-founder, Urban Company.
Urban Company’s first Esop sale occurred in June 2017, followed by sales in December 2018 and August 2020.
“We have focused on creating an employee-friendly Esop programme, with features such as an exercise price of ₹1, a linear vesting schedule and an unlimited hold period to exercise the Esops after an employee leaves the company," Chandra said.
The secondary sale comes just months after Urban Company raised $255 million, led by Prosus Ventures, Dragoneer and Wellington Management earlier in June this year. The round valued the startup at $2.1 billion and also saw participation from existing investors Vy Capital, Tiger Global and Steadview.
The fundraise also included a secondary sale of approximately $67 million by angel and early investors.
After the funding, the company said that it will explore plans to ramp up its services outside India, with a focus to enter the Saudi Arabia and South-East Asian markets.
The company also aims to turn profitable on earnings before interest, taxes, depreciation and amortization (Ebitda) level by the second half of next year, and targets a public listing by 2023, according to co-founder and chief executive officer Abhiraj Singh Bhal.
Bhal expects international forays to contribute to roughly a quarter of the revenue by 2023. Currently, India operations account for up to 90% of the company’s revenue.
In FY20, Urban Company’s consolidated loss widened to ₹155.17 crore from ₹78.48 crore in FY19. Revenue doubled from ₹132.04 crore in FY19 to ₹263.07 crore in FY20, according to regulatory filings filed by the company.
