Scooter-sharing startup Bounce has unveiled a new ‘Bounce ESOP Plan 2019’ which will add equity options worth $4 million to the company’s existing ESOP pool as it looks to reward its expanding workforce.
The Bengaluru-headquartered firm has passed a special resolution to approve the ESOP plan 2019, according to a latest regulatory filing with the Ministry of Corporate Affairs (MCA). The new plan will increase its ESOP pool size from 1,02,220 stock options to 1,29,276 stock options, raising its overall to around $18.1 million.
Rewarding employees with ESOP has been a complicated affair in the startup community. However, in the past 2-3 years, several large-scale startups have displayed the actual value of ESOP through buybacks, instilling the confidence of employees in this system.
While Flipkart is known to have been the largest buyer of ESOP from its employees, there are several others who have bought back from its employees as well. These include the likes of Paytm, OYO, Ola and Byju’s alongside new-age startups such as Rivigo, UrbanClap, Razorpay, Zerodha, Unacademy, and Moglix have brought the practice of rewarding their employees with ESOP.
Recently, Finance Minister Nirmala Sitharaman, in the latest budget, had also recognised the value of rewarding employees with ESOP.
To give a boost to the startup ecosystem, the ministry has planned to defer tax payment on ESOPs by five years or till employees leave the company or when they sell their shares, whichever is earliest.
As for Bounce, it recently closed a $105 million Series D round to become the most-funded startup in this segment. Led by Vivekananda Hallekere, Bounce is now focusing on improving unit economics and becoming profitable at an operational level.
The company has been making efforts to reduce cash burn to balance expenses and revenue. As per the latest development, it has increased the security deposit amount while charging the user a higher cost per kilometre travelled.