Home services platform Urban Company (Formerly UrbanClap) has announced an employee stock sale programme worth Rs 37.5 crore where employees would be given the option to liquidate their vested Employee Stock Options (ESOPs). These ESOPs would be purchased through a secondary transaction by existing investor Vy Capital.
All existing employees who have vested ESOPs are eligible to participate in the current sale programme. About 180+ employees are eligible to participate in this programme, the company said in a statement.
ESOPs are an employee benefit program where an organisation gives its employees ownership in the company through a specific number of shares at a defined price that can be liquidated or sold after a specific period of time, which is called the vesting period. ESOPs are usually offered to give employees a sense of ownership of the company and retain them for a longer period of time.
Urban Company’s current ESOP sale values each ESOP at Rs 1,10,000, which is the same price as the Series E secondary transaction which took place in June 2019.
Urban Company's first ESOP sale event occurred in June 2017, coinciding with the Series C round of funding, and valued each ESOP at Rs 24,500. During this sale approximately 25 employees were eligible. The second ESOP sale event occurred in Dec 2018, valuing each ESOP at Rs 61,864. This coincided with the Series D round of funding, during which approximately 100 employees were eligible. To date, the Company has awarded ESOPs to 670 employees, including 450 current employees.
“This is our third and largest ESOP sale event and re-affirms our commitment towards creating a world-class ESOP programme. The previous two ESOP sale events were held in June 2017 and Dec 2018, respectively. Additionally, Urban Company's ESOP programme has very employee friendly terms, such as an exercise price of Re. 1, accelerated vesting, a flat 4-year vesting schedule (25% each year) and an infinite hold period to exercise the ESOPs after the employee leaves the company. Approximately 450 employees, or 40% of the company's full-time staff have ESOPs, from customer service representatives to our SVPs.”, said Abhiraj Singh Bhal, Co-founder of Urban Company said in a statement.
At Urban Company, employees are awarded ESOPs at the time of recruitment, during an appraisal cycle, and as part of various internal recognition programmes. The company says that the idea is to provide ownership and economic rewards to those who are contributing to the Company’s success and to use it as an instrument to attract and retain top talent.