Crypto unicorn Coinswitch Kuber has completed its first-ever employee stock ownership plan (ESOP) buyback. The round, worth around ₹19 crore ($2.5 million), will be funded through “a mix of internal and external resources”, Ashish Singhal, co-founder and chief executive of CoinSwitch told Mint.
The company became a unicorn in September last year, through a $260 million Series C funding round from American venture capital firms Coinbase Ventures and Andreessen Horowitz.
“The Equity Buyback program is a small effort to acknowledge our employees’ contribution,” Signal said. He didn’t reveal how many employees will benefit from the buyback. That said, CoinSwitch grew from 20-500 employees over the past two years, so it’s likely that ESOPs given to most of its employees are yet to vest.
Startups allocate ESOPs to their employees as part of their salaries at the time of hiring or during appraisals. These ESOPs have a vesting period, before which employees are not allowed to sell their holdings. When the vesting period is over, the company has a choice to facilitate a buyback option and employees can choose to sell their shares at the time.
Singhal added that the company plans to launch “similar liquidity events” in future. He said that CoinSwitch’s user-base grew from one to 15 million between January 2021 and January 2022, and claimed that the company is the largest crypto app in the country. In September, CoinSwitch had said that the funds from its Series C round will also be used to expand the company’s offerings to selling traditional non-crypto assets.
With its maiden ESOP buyback, CoinSwitch joins a growing number of Indian unicorn startups that have announced ESOP buybacks. The company is one of only two unicorn crypto startups from the country, alongside crypto exchange CoinDCX.
As reported by VCCircle in December 2021, as many as 32 Indian startups spent close to ₹3000 crore (approximately $440 million), to buy back ESOPs. This is more than double the number of companies that opted to do so in 2020. In 2020, only 12 companies took the option to buyback ESOPS, spending about $50 million in total.
In January 2022, credit card payments platform Cred expanded its ESOP plan to $500 million, according to a filing with the Ministry of Corporate Affairs (MCA). Unicorns upGrad, Sharechat, Zetwerk, Meesho, Licious, Vedantu, Moglix, PharmEasy, Acko, have also given employees the buyback option over the past year.