Razorpay conducts ESOP sale of $75 Mn in a transaction led by Lightspeed

Business-focused payment gateway and neo banking platform Razorpay has announced its employee stock ownership plan or ESOP sale for its 650 existing and former employees as part of a $75 million transaction. The secondary transaction was led by Lightspeed Venture Partners along with participation from Moore Strategic Ventures, who will subsequently join the company’s cap table.

In a press statement, Razorpay said that current and former employees, as young as 22 who hold vested stocks of the company, will be eligible to sell up to 30% of their vested ESOP shares in this secondary transaction.

This is the fourth ESOP buyback at the company since its inception. Last year, the company announced an ESOP buyback program worth $10 million for its 750 employees. The Sequoia Capital-backed company conducted its first and second ESOP sales in November 2018 and November 2019, respectively. To date, the company claims to have awarded ESOPs to 1940 existing and former employees across levels.

Like the previous buyback, Razorpay did not participate in the current transaction. Technically, it’s an ESOP sale where a third party or investor (not company) buys back shares from employees.

As per Entrackr’s sources, the buyback won’t impact the valuation of the company which was recorded at $7.5 billion during the $375 million Series F round in December last year.

This is one of the largest ESOP buybacks or sales in the Indian startup ecosystem. Last year, Flipkart (owned by Walmart) had bought back ESOPs worth $80.5 million from its employees. BrowserStack also announced a $50 million ESOP liquidity program followed by Swiggy which said that it will buy stock worth $35-40 million held by its employees in 2021 and 2022.

In the ongoing calendar year, merchant commerce company Pine Labs, agritech startup Ninjacart and data analytics and data engineering firm TheMathCompany were top players in the ESOP buybacks list.