StartupTalky

Tag: ESOPs

  • Innoviti Allots New ESOPs Worth INR 25 Cr and Plans to Go Public in 12 Months

    Innoviti, a provider of digital payment solutions, appears to have postponed its initial public offering (IPO) and is now aiming to list on stock exchanges within the next 12 months. Rajeev Agrawal, the company’s founder and CEO, stated in a statement that Innoviti aims to achieve operating profitability within the next two quarters. According to him, the company has started the IPO planning process with the goal of listing within the next 12 months and plans to achieve operating profitability within the next two quarters. Notably, Innoviti stated in August of last year that it intended to launch on the market within the following 12 months.

    In the meantime, the business has granted 110 employees additional ESOPs totalling INR 25 Cr in the lead-up to the IPO. As a result, Innoviti currently has INR 106 Cr in the entire ESOP pool. The new grants range from INR 3 Cr to INR 1 Lakh, according to the company’s announcement. Additionally, according to Innoviti, 50% of the new ESOPs have been awarded to specific employees for their “outstanding contributions,” with the other 50% going to individuals who have worked for the company for more than a year. According to Agrawal, throughout the “last few quarters,” the financial SaaS company had a 58% decrease in EBITDA loss and a 67% increase in sales.

    Company’s Operations and Financial Outlook

    According to the company, it is now making less than INR 8 Cr in annualised EBITDA loss and operating at an annualised run rate (ARR) of INR 160 Cr. Additionally, Innoviti reported that last year saw an annualised growth rate of 192% for their sales negotiating software, “Innoviti Genie,” which is targeted at electronics shops. The business also announced that their enterprise payments software, “Innoviti Unipay,” had a 28% EBITDA and a 15% annualised growth over the previous year. The startup, which Agrawal founded in 2002, lets retailers take payments and incorporate real-time sales data into important business operations. It states that it processes more than 20,000 merchants and more than 2,000 Indian cities’ worth of purchases per year, totalling more than INR 80,000 Cr.

    Funding Rounds

    Innoviti obtained a Reserve Bank of India (RBI) internet payment aggregator (PA) license in March 2024 to run its PA, “Innoviti Link.” The business declared in August 2024 that its Series E investment round has closed at INR 70 Cr. Innoviti has attracted more than $100 million in capital so far, including support from Bessemer Venture Partners, FMO, and Catamaran Ventures, among others. During the fiscal year 2022–2023 (FY23), it reported operating revenue of INR 110.2 Cr and a loss of INR 86.56 Cr.

    Paytm Expands ESOP Pool with 2.03 Lakh New Stock Options
    Paytm enhances its ESOP pool by adding 2.03 lakh stock options, reinforcing its commitment to employee rewards and growth.
    StartupTalkyNitin Konde

  • Under ESOP, Nykaa Allots 1.80 Lakh Equity Shares

    Nykaa, a leading e-commerce company in the beauty and fashion industry, has granted its employees 1.80 lakh equity shares through the Employee Stock Option Plan (ESOP). This follows the startup’s announcement of a 66.3% increase in its consolidated net profit from INR 7.8 Cr to INR 12.97 Cr in the second quarter of FY25. As stated in a filing, “The equity shares so allotted shall rank pari-passu with the existing equity shares of the Company in all respects.”

     It hasn’t, however, revealed the shift in its paid-up capital.  It is relevant to mention that Nykaa incurred employee benefit expenses totalling INR 161.49 Cr in Q2 FY25. Compared to INR 136.32 Cr spent the previous year, this amount represents an 18.5% increase. The broking firm JM Financial has kept its “buy” recommendation for the e-commerce behemoth at INR 250 following the release of its financial results.

    Nykaa Scaling Financial Growth

    The broking firm claims that the startup has achieved growth despite a “unfavourable demand environment.” Nevertheless, broking firm Bernstein kept the startup’s “market-perform” rating, pointing to an 8.6% drop in the EBIDTA margin. It established INR 165 as the goal price. In the September quarter of FY25, Nykaa‘s operating revenue increased 24.4% to INR 1,874.74 Cr from INR 1,746.11 Cr in the second quarter of FY24. Revenue grew 7.2% on a quarter-over-quarter (QoQ) basis from INR 1,753.44 Cr.

    BPC Segment Continues to be Highest Revenue Generator

    The fashion vertical continues to trail behind, despite the beauty and personal care (BPC) segment showcasing a 24.3% YoY gain in revenue to INR 1,702.89 Cr. In Q2 FY25, however, this segment reported a 21.7% YoY increase in revenue to INR 166.10 Cr. The startup’s total costs increased by 7.3% QoQ and 23.7% YoY to INR 1,858.93 Cr. The company’s biggest expenditures were on marketing, personnel benefits, and the acquisition of traded goods.

    ESOP is Gaining Popularity Among Indian Startups

    According to a 2024 survey of 160 companies, 78% of them offered employee stock option plans (ESOPs) to their staff, a considerable increase from 59% in 2021. This indicates that ESOPs are becoming more and more popular among startup owners. More firms are now offering ESOPs to all employees, not only senior management, according to a survey done by Saison Capital, XA Network, and Carta. Compared to one in four in 2021, one in three firms now provide these plans to all employees.

    Furthermore, the median ESOP pool size grew from 9% in 2021 to 12.6% in 2024, and 90% of founders now talk about ESOPs with candidates during interviews or job offers, up from 75% in 2021. Additionally, the reasons for providing ESOPs have changed; in 2024, 40% of founders cited cost reductions, up from 28% in 2021. The founders cited the necessity to retain people as the second most important reason for putting these plans into action, behind creating a sense of ownership and company culture.

    Even with this increase, fewer than 30% of founders still fully understand the complexity of ESOPs, a percentage that hasn’t changed since 2021. Just 14% of founders felt educated about the tax consequences of ESOPs, which is a fairly low level of understanding.

    Nykaa Introduces 10-Minute Delivery—Faster, Not Ultrafast
    Nykaa shifts focus to 10-minute delivery to offer faster service without adopting ultrafast models, enhancing customer convenience while balancing efficiency.
    StartupTalkyNitin Konde