Fintech Slice said on February 14 that it had completed its maiden employee stock ownership plan (ESOP) buyback worth Rs 65 crore. Around 60 of both former and existing employees are eligible for the buyback, the startup added.
The Tiger Global-backed startup currently provides a Visa card focused on millennials which allows customers to pay for their purchases in three instalments. Slice's card issuance spiked from 20,000 in January 2021 to 200,000 per month currently led by the growing appetite for credit in India.
Slice founder and CEO Rajan Bajaj said, "Our team's relentless passion and hard work has been instrumental in our rapid growth. This buyback plan is our little way of saying 'thank you' to our teams who have not only contributed to Slice but also to the larger financial ecosystem."
Slice said that an average of Rs 1.2 crore has been paid out to eligible existing and former employees in this initiative.
Startups issue ESOPs as a tool to attract and retain talent. It has become all the more significant in the current context, amid the unprecedented war for talent.
Also Read: Slice joins unicorn club with $220 million fundraise
As part of the budget announcements, startups had sought relief on the tax structure for ESOPs which was not granted. It is now taxed twice- during the time of exercise and time of sale. The startup ecosystem had sought that they be taxed only at the time of sale and not at the time of exercising.
While ESOPs faced flak for not providing enough liquidity, 2021 bucked the trend. Multiple startups in India including Cred, Swiggy, Byju's, Meesho, BharatPe, UpGrad, among others announced ESOP buybacks cumulatively worth $440 million, an eight-fold jump compared to the previous year, according to data from Entrackr.
In November 2021, Slice entered the unicorn club after raising $220 mn in its Series B fundraise co-led by Tiger Global and Insight Partners. The startup says it has registered a 40 percent month-on-month growth and has over 7 million registered users.
Slice's 'super card' serves as a simpler alternative for credit cards with lower credit limits making more people eligible to avail the benefits of paying later. The company's monthly issuance is now in-line with leading banks like HDFC Bank and ICICI Bank that issue anywhere between 2,00,000 to 3,00,000 credit cards per month.
The Bengaluru-based startup plans to invest in technology and product design and add more products starting with Unified Payments Interface (UPI) which is slated for launch in 2022.
The company’s turnover for FY21 stood at Rs 35 crore as compared to Rs 30 crore in the previous financial year, according to regulatory filings. Loss after deducting taxes stood at Rs 8.9 crore, up from 1.87 crore in FY20.