upGrad announces ESOP buyback worth $29.5 mn

Following its first ever external funding, Mumbai headquartered edtech platform upGrad has announced an Employee Stock Ownership Plan (ESOP) buyback of Rs 220 crore ($29.5 million) for its employees.

The maiden ESOP liquidity event will benefit 37 early team members, the company in a statement said. 

“ESOP is still a less understood and appreciated currency that allows team members to take a much longer-term view on their current place of work.  

Moving jobs for promotions or increments will be less prevalent in the future as the smartest will look for long-term growth in the company, the founders, and the team that can match their ambitions” Ronnie Screwvala, chairman and co-founder, upGrad, said.  

The ESOP pool accounts for 13% of the company’s equity base. In January this year, upGrad granted ESOPs to 600 employees, cover all employees who have completed a year at the company.  
 
ESOPs are typically provided by companies as a benefit plan and are meant to retain talent. 
 
Founder Group, led by media industry veteran Screwvala, owns over 70% of the company. 

upGrad raised $120 million from Singapore based sovereign fund Temasek in April.

Subsequently, the company recently said it has earmarked $250 million for M&A (mergers and acquisition) deals over the next 7-9 months. 

The edtech firm said its annual revenue run rate (ARR) for financial year 2020-21 (FY21) touched Rs 1,200 crore. The company had an average revenue per user (ARPU) of Rs 2.5 lakh. 

With a presence in over 50 countries, upGrad offers more than 100 courses in collaboration with global universities such as Deakin Business School (Australia), Duke CE (US), Michigan State University (US), Liverpool Business School (UK), IIT Madras (India), and IIM Kozhikode (India).   

The company claims to have impacted over 1 million total registered learners over 50 countries across the world.