Meesho, an online shopping platform, announced the beginning of an employee stock ownership plan (ESOP) buyback program, worth INR 200 crore. This amount is considered the company’s largest ESOP buyback pool to date. It’s the fourth buyback in this horizontal e-commerce unicorn. In February 2020, Meesho bought back shares worth $1 million in Feb 2020. In November 2020, it bought shares worth $5 million and $5.5 million in October 2021. However, due to the new buyback, around 1,700 employees across junior-level executives to senior leadership will benefit.
This e-commerce business provides small businesses, such as SMBs, MSMEs and individual entrepreneurs, access to millions of customers, a selection from over 30 categories, payment services, customer support capabilities and pan-India logistics. The Vidit Aatrey-led organisation recently declared the launch of Valmo, a full-fledged logistics marketplace. Valmo allows the network of micro-entrepreneurs to become Meesho logistics partners. Messho claimed that it was the first horizontal Indian logistics company to achieve profit, in July 2023. After this announcement in July 2023, the company remained profitable and cash flow positive. In FY23, Meesho also cut its losses by 48% but its revenue rose 77% year-on-year to INR 5,735 crore in the last accounting year.
Recently, the employee stock buyback program for over 50 employees was introduced by MyGate, a community management app service provider. As per the startup news provided by TheKredible, the total EOSP buyback/payout/liquidity rose to nearly $802 million in 2023.
What’s the Take of YFS on Meesho’s Largest ESOP Buyback?
The ESOP buyback is a significant step by the e-commerce giant Meesho to benefit its employees across different levels. With revenue rising by 77% and losses getting reduced, the company is on the way to achieving stronger growth in times to come, reckons Your First Startup (YFS).