Friday 31 August 2018

Ex-Employees Of Logistics Unicorn Rivigo Encash $10 Mn In ESOPs

A number of senior as well as middle management executives had vested their stock options in Rivigo
Rivigo founders Gazal Kalra and Deepak Garg didn’t buy back any shares
Esops make 7-10% of Rivigo's overall shareholding
Nearly 30 ex-employees of Gurugram-based logistics Unicorn Rivigo have encashed on their stock options in the company, reaping in an estimated amount of $10 Mn.
“Over 30 employees have sold the shares, after exercising their options, in times of financial need and have benefited substantially from the life-changing wealth. Some of them have used the money to fund their children’s foreign training, while others have used it to build a house,” said Gazal Kalra, cofounder at Rivigo, in a media statement.
The shares were picked up by existing as well as new investors. However, the company’s founders, including its chief executive Deepak Garg, did not buy back the stock.

Rivigo ESOPs: The Key Pointers

  • The secondary transactions, the last of which took place in July, were not at a discount to the valuation commanded by the company in its primary funding rounds.
  • Rivigo has decided not to cap vesting of employee stock options. This has allowed a number of executives to sell all their stock at one go, a rarity in startups that usually allow employees to sell their stock in ventures only in stages, and that too at a discount.
  • Esops form about 7-10% of its overall shareholding

Rivigo: The Growth In A Nutshell

Inc42 DataLabs, in its weekly financial analysis series What The Financials, has earlier revealed that Rivigo recorded a total income of $58.60 Mn (INR 401.82 Cr) in FY17, up by 370% from its FY16 income of $21.67 Mn (INR 148.61 Cr).
Further, the company reported total expenses of $67.48 Mn (INR 462.64 Cr) in FY17 and an operating income of $56.45 Mn (INR 387 Cr) in the same period.
Rivigo has also been speculated to have nearly 1,770 employees, on whom it spent $10.82 Mn (INR 74.21 Cr) in FY 17 — 16% of its total operating expenses.
In the uber-competitive logistics space, which is poised to touch $307 Bn by 2020, Rivigo competes with equally strong investor-backed startups like Blackbuck, Locus, Locanix, ElasticRun, 4tigo Network Logistics, among others.

Esops: The Trend Is Here To Stay

The Esop encashment at Rivigo comes soon after Temasek Holdings bought sharesworth $30 Mn from former and early employees of the cab-hailing company Olaas part of a secondary share sale.
Prior to this, Walmart-Flipkart acquisition had opened up former and current employees of Indian ecommerce company for massive Esop payouts.
Flipkart emailed employees to share that it will repurchase up to 30% of its former employees’ vested Esops at a share price ranging from $125 to $129.
Further, employees can liquidate their stock options in three instalments — half of the stock on the date of closing of the Walmart deal, 25% a year later, and the remaining stock options two years after the first liquidation.
Here are some other startups which have joined Esop bandwagon:
  •  Unicorn food delivery company Swiggy approved its first employee stock repurchase programme. The share buyback or Esop, which had to be implemented in June, was estimated at over $4 Mn (INR 27 Cr).
  • Founder and CEO of Paytm Vijay Shekhar Sharma had also pledged about 5% of his personal holding in Paytm Mall for the Esop pool. This move added about $50 Mn worth of stocks to the Esop corpus.
  • Earlier this year, furniture player Urban Ladder offered Esops in order to attract senior-level talent, according to the MCA documents filed by the company.

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