After Dream11, Zomato, Swiggy and Postman, PharmEasy has turned out to be the fifth firm to enter the $5 billion valuation club in 2021. It raised over $1 billion in primary and secondary capital this year and acquired Medlife and Thyrocare.
In its latest fundraise, the company’s valuation jumped to $5.6 billion. The overall growth story for PharmEasy in FY22 has been exceptional and in a bid to reward its co-founders and employees, the company has created new employee stock options (ESOPs) for them.
PharmEasy has passed a special resolution to allot 79,987 ESOPs to each of the five co-founders: Siddharth Shah, Dharmil Sheth, Hardik Dedhia, Karsh Parekh and Dhaval Shah. According to Fintrackr’s estimates, the collective worth of these shares in the Founders’ ESOP pool is around Rs 236 crore.
With this move, PharmEasy joins the likes of several growth-stage companies that have alloted additional shares to co-founders. Vedantu had created a management stock option which accounted for 9.51% stake in the company whereas Unacademy’s three co-founders have additional holdings in the business (besides equity) via phantom stock. Phantom stock is a plan for employees where they get the benefits of stock ownership without actually owning company stock.
B2B unicorn OfBusiness and Zomato and BigBasket also had issued bonus shares to its founding team. The trend of allocating fresh stock to co-founders appears to be a common component at high growth or late-stage startups.
Apart from co-founders, PharmEasy also expanded its ESOP pool with Rs 356 crore worth of new options for eligible employees. According to regulatory filings, PharmEasy has created a new ESOP pool with 603,103 equity shares. Importantly, it also amended its existing ESOP Scheme to align with SEBI regulations.
This new allocation is a common practice amongst most of the growth and late-stage startups that are contemplating public listing in the next two years.
While five companies have crossed the $5 billion valuation mark so far in 2021, overall nine companies have been valued at over $5 billion with three decacorns (valued at over $10 billion): Paytm, Byju’s and Zomato (now a public company).
Oyo, PhonePe, Swiggy and Ola are currently valued between $5-10 billion bracket. Ola Electric, Meesho, CRED, Pine Labs, BrowserStack, Razorpay, Unacademy and several others are also set to be valued at over $5 billion whenever they raise their next round.