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Urban Company concludes ESOP buyback at $2.8 Bn valuation

Home service marketplace Urban Company has concluded an ESOP buyback program worth Rs 55 crore or $7.3 million. This is the fourth ESOP liquidity program completed by the Gurugram-based company since its inception.

According to Urban Company, the latest transaction has been closed at a valuation of $2.8 billion. The size of the buyback is not significant but it stands out for the  33.33% premium over its last valuation six months ago.

It was valued at $2.1 billion during its $255 million Series F round in June this year.

All current and ex-employees with vested ESOPs were eligible to participate in the programme, with the option to sell upto 100% of their vested ESOPs, said Urban Company in a blog post.

As of now, Urban Company has facilitated Rs 100 crore worth ESOP sales for its 940 current and ex-employees across the four programs. Among them, 550 employees had vested ESOPs and were eligible to participate in the transaction. The company’s maiden ESOPs buyback was held in June 2017, followed by the second such event in December 2018 and the third in August 2020

Only last week, the Abhraj Singh Bhal-led company had executed fresh allotment of equity shares under its ESOPs plan to 181 employees including a clutch of former and current top-level executives.

Entrackr had exclusively reported the development.

Urban Company is counted among a clutch of growth and late-stage startups that have facilitated ESOPs liquidity in 2021. The list includes Vedantu, Meesho, Browserstack, Udaan, Unacademy, ShareChat, Razorpay, CRED, MPL, Licious, Classplus and HealthifyMe.

2021 has also been marked by a much more generous approach towards all employees, both current and former, when it comes to vesting of ESOPs across many startups.  This has been reflected not just in the frequency of liquidity events, but also in the generous terms for most employees, including former employees. 

Earlier this year, Urban Company had announced an open-source ESOP framework in collaboration with MyStartupEquity, a cap table and ESOP management product by LetsVenture. The framework advocates better ESOP policies, structure terms and conditions among others.

During FY21, Urban Company managed to buck the trend of contracting businesses by growing operating revenue by 13.3% to Rs 247.7 crore in FY21 from 218.6 crore in FY20. During the same period, its losses soared 61% to Rs 249.3 crore in the last fiscal as compared to Rs 155.2 crore during FY20

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