The First ESOP Buyback Completed by NowPurchase

Nitin Konde, Varun Bhardwaj

Nov 22, 2024 — 2 min read

NowPurchase Completes Its First ESOP Buyback Program

The first-ever employee stock option plan (ESOP) buyback has been accomplished by SaaS marketplace NowPurchase. The business's founder and CEO, Naman Shah, told the media that 40 of its employees opted to cash out some of their vested stock options in the company through this repurchase option, while the remaining employees decided to keep their shares.

The business claimed that the buyback was worth about 100 times the original acquisition price, despite not disclosing the ESOP's financial details. In July 2019, the ESOP programme was first introduced.

How NowPurchase Operates?

NowPurchase, which was founded in 2017 by Naman and Aakash Shah, helps metal manufacturers by obtaining raw materials through its metal cloud platform and scrap recycling services. Additionally, it offers its consumers a staff to provide on-site service and quality assurance, a proprietary SaaS platform to improve their production process, and a WhatsApp bot to find prices and stock in real time.

The ESOP buyback, according to a statement from NowPurchase, is an example of the company's dedication to creating a top-tier workforce that benefits from their labour and holds significant stock in the business. The company's dedication to growth and value creation for everybody is demonstrated by the fact that this buyback includes workers from all functional areas, including warehouse personnel, prospective CXOs, and everyone in between. According to Naman Shah, this would not have been feasible without the backing of Orios & InfoEdge, the brand's initial institutional investors.

Company’s Funding Rounds and Expansion

The Kolkata-based business earlier collected $6 million (about INR 50 crore) in September from a variety of investors in the form of debt and equity injection. The new funds were used to expand and implement innovative solutions that would better serve the metal production sector. In light of this, Shah has now stated that activities in the states of Tamil Nadu, Rajasthan, and Punjab will be operational by the end of this month.

Current ESOP Scenario in India

This year, about 20 Indian businesses have launched ESOP buybacks, giving their staff members a chance to increase their income. For example, earlier this month, AppsForBharat, a Bengaluru-based startup, launched its first employee stock ownership plan (ESOP) repurchase programme valued at approximately INR 2.1 Cr, allowing 25 employees to cash out their company stock options.

Additionally, the first repurchase option for Adda247, an edtech business sponsored by Google, was disclosed in July and benefited at least 130 employees in a variety of jobs and tasks. In addition, the 153 team members of the agritech firm DeHaat, which was supported by Peak XV, benefited from the completion of its first-ever employee stock ownership plan (ESOP) buyback programme in June, which was worth INR 10 Cr.