Porter quietly turns unicorn, closes internal round at $1 billion valuation

The company’s secondary round is also of significance because unlike most other secondary transactions, this one took place at a premium and not at a discount. In secondary deals, existing shareholders sell shares to another investor so the cash does not go into the company’s coffers.

In most cases, when shares change hands during a secondary transaction, investors value the company at a discount of at least 25-30 percent from its last primary valuation, which meant Porter could have been valued below $500 million. However, the leadership decided on a $1 billion valuation.

That jump in valuation also comes on the back of a strong top line. The company's revenue more than doubled to Rs 1,754 crore in FY23 from Rs 848 crore in FY22, which likely justifies the higher valuation.

This is not the first friends and family round where Porter has liquidated its ESOP pool and commanded a premium over its previous valuation. In the January-March quarter of 2023, the company sold shares from its ESOP pool worth Rs 7-8 crore to friends and family, much like in the current round, at a valuation of $700 million, sources said.

“The recent round reaffirms the leadership’s trust in Porter’s growth potential. Since the previous ESOP liquidation event, Porter’s annual recurring revenue (ARR) has increased 3-4X, which also justifies the back to back increases in valuation,” one of the person’s quoted above told Moneycontrol.

Porter did not offer comments for this story. Founded in 2014 by Pranav Goel, Uttam Digga and Vikas Choudhary, the logistics provider helps in optimising last-mile delivery operations for businesses by providing on-demand light commercial vehicles (LCVs). It has been expanding operations, by running an intra-city courier service on two-wheelers, for instance, to widen its revenue streams.

An increase in valuation during an ESOP liquidation events also augurs well for Porter's employees since they get rewarded handsomely for their efforts in helping the company scale up. Over the past few years, ESOPs have become an effective tool to attract top talent.

ESOP cashouts led to $1.46 billion of wealth being put in the hands of startup employees between 2021 and 2023, according to data from Qapita, an equity management platform. Indeed, ESOPs have now become a wealth multiplier tool for most employees, which is a shift from a few years ago, when they had little value. A slew of new-age IPOs, from Zomato to Paytm to Delhivery, have together changed the perception of ESOPs in employees’ minds.