On-demand logistics service provider Shadowfax has announced an employee stock ownership plan or ESOP buyback program for its employees. The total value of the buyback is estimated at $5 million.
This is the first buyback offering by the company where eligible employees can sell up to 35% of their vested ESOP shares, according to the company’s press release. Shadowfax employees who have been granted ESOPs and completed more than four years with the company will be eligible to participate in the buyback program.
“The ESOP buyback is our way of reciprocating their efforts and we envisage that it will help unlock value and create wealth for our people. It is because of our team and their strong resolve in the company’s vision, we have excelled in an intensely competitive environment and gained substantial impetus in the logistics industry in a short span of time,” said Abhishek Bansal, Co-founder and CEO of Shadowfax.
Shadowfax has also announced the appointment of Praharsh Chandra and Gaurav Jaithliya as co-founders. Chandra and Jaithliya have been an integral part of the leadership team at Shadowfax since inception and are currently chief of operations and chief of strategy and investment, respectively.
Since the beginning of this fiscal several companies such as Zomato, Mobikwik and Rebel Food had elevated their long term leaders in co-founder roles. The trend of appointing co-founders has also been frowned upon in the ecosystem as a large chunk of people believe that co-founders couldn’t be brought in at later stages of startups.
According to Shadowfax, the move will help the company to strengthen its leadership team and scale up its process and quality initiatives.
During Covid-19 induced lockdown, Shadowfax had to let go about 50 employees who were deployed to set up facilities in smaller cities. The firm also decided to hold on to its cloud kitchen’s expansion plans due to the pandemic.
Shadowfax will join the likes of Unacademy, Zerodha, Urban Company, Mobile Premier League and Swiggy which also announced ESOP buyback and liquidity program in 2020. Over the past couple of years, trends of buying stocks by startups have picked up steam. Last year several companies including Moglix, Razorpay, Bigbasket and Flipkart had executed hefty buybacks.