Merger-bound PharmEasy buys back $3 million worth ESOPs

Online pharmacy services provider PharmEasy on Tuesday said it has bought back employee stock ownership plan (ESOP) shares from its employees, for about $3 million, in its first ESOP buyback.

“We have bought back ESOPs of early stage employees who got us where we are today… We would like to thank our team for getting us here and also our shareholders who have allowed us to make this possible,” PharmEasy co-founder Dhaval Shah told TechCircle, in an emailed statement.

The share buyback programme comprised about 40 employees, Shah added.

Shah declined to provide other details of the transaction, and the total number of employees at the firm. “This is the first time we have done it, but we would love to do more in the future as well,” he said.

The Mumbai based startup recently got a merger approval from India’s competition watchdog.

The Competition Commission of India, late September, approved PharmEasy’s proposal to acquire rival startup Medlife. The merged entity will operate under parent holding API Holdings. 

API Holdings was incorporated in 2019 to house the merged entity of PharmEasy and Ascent Health and Wellness Solutions. PharmEasy is currently operated by 91Streets Media Technologies.

Founded in 2015 by Shah and Dharmil Sheth, PharmEasy connects patients with chemist shops. In its last known fundraising, it secured $220 million from Temasek Holdings.

API Holdings carries out wholesale sale and distribution of drugs, transportation and delivery services, ecommerce and telemedicine platform operations, directly or through its subsidiaries.

At least four other startups operating in India’s direct-to-consumer startups have announced ESOP share buybacks in October and November so far.

Explained: Why has Covid-19 made ESOPs popular?

Mid October, edtech startup Unacademy announced its plans to launch a second buyback on December 10, at about $4 million. 

On November 10, food delivery unicorn Swiggy said it had unveiled a share buyback programme for eligible employees to vest their shares for a pool size of $7-9 million, while social commerce startup Meesho said it will buy back ESOP shares at about $5 million.

On Thursday, used cars marketplace Cars24 said it initiated an ESOP buyback worth $4.7 million.