Shadowfax offers ESOP buyback worth $5 million, elevates two senior execs to co-founder

Employees who have been with Shadowfax for more than four years can sell up to 35 percent of their vested stock options

Published: Dec 9, 2020
ESOP_416811556 Image: Shutterstock

E-commerce logistics firm Shadowfax said on December 11 that it was offering to buy-back employee stock options (ESOPs) worth $5 million, giving some early employees a financial windfall.

Employees who have been with Shadowfax for more than four years can sell up to 35 percent of their vested stock options, a move led by the company's recovery to pre-pandemic volumes and beyond and meant to motivate employees.

Shadowfax has also elevated its Chief of Operations Praharsh Chandra and Chief of Strategy Gaurav Jaithliya to co-founder effective December. This is a relatively-new trend in the startup ecosystem where senior executives may not technically be a founding member of the startup, but are given the designation to recognize their importance to the company.

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� has been a challenging year. But Shadowfax has grown 2X compared to pre-COVID levels, we witnessed teams across functions at Shadowfax step up and make an exceptional contribution during this time. We have always believed that our team is one of our strongest assets. Our employees continue to play a key role in the growth journey,” said Abhishek Bansal, the co-founder and CEO of Shadowfax, in a statement.

“The ESOP buyback is our way of reciprocating their efforts and we envisage that it will help unlock value and create wealth for our people. It is because of our team and their strong resolve in the company's vision, we have excelled in an intensely competitive environment and gained substantial impetus in the logistics industry in a short span of time,” he added.

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ESOP exits were seen only at unicorns and during large acquisitions for the most part, but over the past year, a number of growth stage firms have also begun offering employees early exits for a small portion of their stock options.

In the last one year, social commerce firm Meesho, discount brokerage Zerodha, online learning firm Uncacademy and online pharmacy PharmEasy, among others, have offered ESOP buybacks. Here, generally as part of a funding round, investors acquire secondary shares from these employees in addition to the primary capital they are infusing into the company.

Original Source: https://www.moneycontrol.com/news/business/companies/shadowfax-offers-esop-buyback-worth-5-million-elevates-two-senior-execs-to-co-founder-6208051.html

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