Exclusive: CRED expands its ESOP pool size to $500 Mn

Credit card payment app CRED has increased its employee stock ownership plan or ESOP pool size to $500 million, joining the likes of several growth-stage startups which have increased their ESOP size in the past 12 months.

CRED has passed a special resolution to increase its ESOP pool by 112,504 stock options to 392,958 stock options in total, regulatory filings show. The new ESOP pool has been increased from 10% to 12.5% of its paid up capital.

As per Fintrackr’s estimates, CRED has expanded its ESOP pool size by Rs 1071.3 crore or $143 million and the company’s overall ESOP pool now stands at Rs 3,745 crore or $500 million. 

The development comes soon after the company’s announcement which said that its cumulative ESOP buyback for 2021 will be up to Rs 100 crore or $13.3 million. CRED also said that its total ESOP buyback in 2021 was worth approximately Rs 145 crore or $19.3 million.

With this move, CRED has joined the likes of top Indian companies in terms of ESOP pool size. According to a report by Longhouse Consulting, Flipkart has created a Rs 17,000 crore[$2.26 billion] ESOP pool whereas Oyo has created a pool of Rs 7,569 crore [$1 billion]. Zomato, Paytm and Nykaa have an ESOP pool of Rs 5,639 crore [$750 millon], Rs 4,571 crore [$610 million] and Rs 4,280 crore [$570 million], respectively.

In this list, CRED has just surpassed India’s most valued startup Byju’s which has an ESOP pool of Rs 3,092 crore [$412 million]. If we count only non-listed companies then CRED will be only behind Flipkart and Oyo in terms of ESOP pool size. 

As per Fintrackr's estimates, edtech unicorn Unacademy has an ESOP pool size of $400 million. According to ShareChat, its ESOP pool is currently valued at Rs 1,280 crore.

In the past 12 months, several growth and late-stage companies such as Urban Company, PhonePe, Zerodha, PharmEasy, OfBusiness, Swiggy, Simplilearn, Meesho, Browserstack, Udaan, Unacademy, ShareChat, Razorpay, MPL, Licious and Classplus have either expanded their ESOP pool or announced liquidity program to reward their employees.

As per our data-tracking platform Fintrackr, the Indian startup ecosystem had more than 40 ESOP buyback announcements in 2021 where startups bought back ESOP worth more than $440 million held by their employees.

This year, a couple of startups including HomeLane and Ninjacart have already announced their ESOP liquidity programs worth $3.3 million and $13.3 million respectively.

Kunal Shah’s led CRED is one of the most valued fintech startups in India. The company had raised $251 million in its Series E round at a $4.01 billion valuation and according to Entrackr’s sources, it is in talks to raise another round at over $5 billion valuation.