ShareChat parent to buy back ESOPs worth $19 million

Mohalla Tech, the parent company of regional language social media platform ShareChat and short video app Moj, will buy back employee stocks worth $19.1 million, the company announced on Friday.

The move comes a few months after it raised $502 million at a valuation of $2.1 billion, thereby making an entry into India’s startup unicorn club.

The Bengaluru-based startup said that about 200 existing and former employees with vested options will be eligible to participate in this process. They can sell upto 100% of their vested shares at its present stock valuation.

ShareChat has also revised its employee stock ownership plan (ESOP) exercise price from Rs 1,551 to Re 1 and tweaked its vesting policy. According to the new policy, 25% of ESOPs will vest in the first year, followed by 8.25% every quarter. Previously, the company had an annual vesting schedule. In case any employee leaves the organisation, they will be able to keep all the vested options along with access to related benefits.

“We are presently witnessing an exciting growth journey and following an ambitious plan. Therefore, we have aligned our ESOP policy accordingly to reward our people who will be instrumental in paving the way for the next level of growth,” cofounder Ankush Sachdeva said. “This ESOP buyback is our way of giving back to our employees by helping them in their wealth creation journey,”

Over the past year or so, several Indian startups including PhonePe, Udaan, Cred, Paytm, Acko, Licious, and ShareChat have awarded their employees with ESOP buybacks, leading to wealth creation at a time when the sector has seen a significant uptick due to the Covid-19 pandemic.