One97 Communication owned, payments and gateway company Paytm is now valued at $10 billion. As a result, the existing and former Paytm employees have been able to liquidate their vested ESOPS (employee stock ownership plan) by selling them to new investors including undisclosed family offices.
Over 200 employees of the company liquidated their shares for Rs 300 crore. Earlier the company was valued at $7 billion when it raised $1.4 billion from SoftBank Group. This valuation has made Paytm, the second most valued startup after Flipkart, which is valued somewhere close to $12 billion.
A similar sale round occurred early last year where a 100-crore employee liquidity event took place. Till now around 200 Paytm former and existing employees have been able to sell shares for Rs 500 crore.
An employee stock ownership plan (ESOP) is a qualified defined-contribution employee benefit (ERISA) plan designed to invest primarily in the stock of the sponsoring employer. ESOPs are “qualified” in the sense that the ESOP’s sponsoring company, the selling shareholder and participants receive various tax benefits. ESOPs are often used as a corporate finance strategy and are also used to align the interests of a company’s employees with those of the company’s shareholders.
“Paytmers who have been with the company since inception to as early as one year have benefited,” the company said in a statement.
Paytm has forayed into several services like- Paytm Mall, Paytm Payments Bank, Paytm Wallet and Paytm Money- offering investment and wealth management products, and is backed by the likes of – SoftBank, Alibaba, SAIF Partners, and Ant Financial.
Paytm founder, Vijay Shekhar Sharma had also sold his 1% share to the parent company One97 last year for Rs 325 crore to raise money for Paytm payments bank.