ESOPDhan, a startup in the financial services industry, plans to raise structured financing to promote growth
In order to finance its business model of lending to employees of high-growth startups to exercise vested ESOPs, financial services company ESOPDhan is looking to raise structured financing in the upcoming weeks. Shravan Shroff and Nitin Agarwal, the start-founders, up's have so far supported it with equity. Once its present corpus is exhausted, ESOPDhan plans to pursue raising structured financing from investors and big family offices.
It has provided a Rs 20 crore loan to 15 employees of two US-based software companies who are based in Bengaluru and Hyderabad. It aspires to sign comparable agreements with 10–12 additional businesses in the upcoming year. The company claims that because it concentrates on unicorns and accounts for exit timetables of at least two years, its business model is "cushioned" against market volatility. As founders, we currently fund the majority of the company with equity. Later on, we will do it using structured financing, according to Agarwal.
Oyo Rooms, Exotel, FarEye Technologies, Wow! Momos, Aarav Unmanned Systems (AUS), Uniphore, Sugar Cosmetics, Vahdam Tea, Karza Technologies, and Vista Rooms are a few companies in which Agarwal has made notable investments. Oyo Rooms, Get My Parking, FarEye Technologies, Vista Rooms, Uniphore, Exotel, Aarav Unmanned Systems (AUS), Zip Dial, Karza Technologies, Rubix Data Sciences, and Earth Rhythm are only a few of Shroff's personal investments.
The two invested Rs 30 crore in the creation of ESOPDhan, of which roughly Rs 20 crore has been lent. The plan is to use up all of the money that are on hand before turning to structured debt to raise further funding for the company's operations. "We are confident that we can obtain additional monies as needed, therefore we are not concerned about the funding. In around four weeks, we'll start raising structured debt "Agarwal stated, but he did not provide a precise loan amount.
Structured debt is the preferred route for the company as the payouts to lenders will be structured as and when ESOPs are liquidated, Agarwal explained. ESOPDhan, he said, is aiming at a Rs 500-crore loan book by 2025, helping more people buy stock options being offered by their employers. At times, employees find it difficult to subscribe to ESOPs soon after vesting because funds are not available for paying the vesting price and income tax.
ESOPDhan has been working to solve that problem for employees, and in the process also facilitating a healthy employer-employee relationship. Exercising their stock options early helps employees with lower taxes on the sale of stocks, an attractive proposition for them, he said. The company claims that there is a significant unmet demand because the vested ESOPs of Unicorns in India total more than USD 10 billion.
In terms of demand, he declared, "We are not concerned." The company will maintain a laser-like focus and solely finance ESOPs by unicorns in the face of macro uncertainties that are shaking the market and the startup ecosystem (with the USD 1 billion valuation and above). Focusing on unicorns gives ESOPDhan the assurance of a "easy exit" from such funding at some point in the future via the IPO option. ESOPDhan, a non-banking finance firm authorised by the Reserve Bank of India, uses unique technologies to decide which projects to support.
The startup began with ESOPDhan sponsoring 5 India-based workers of Harness, a company with a US$3.7 billion valuation whose platform aids businesses in accelerating their Cloud ambitions and quickening the release of software improvements. The startup began with ESOPDhan sponsoring 5 India-based workers of Harness, a company with a US$3.7 billion valuation whose platform aids businesses in accelerating their Cloud ambitions and quickening the release of software improvements. The following group of 10 employees from Phenom, a US-based AI-powered HR-tech platform with a USD 1.37 billion market cap, were supported through ESOPDhan. Phenom makes it possible to uncover talented individuals, assists job seekers in finding the ideal position, and optimises HR strategy, process, and cost.
It has provided a Rs 20 crore loan to 15 employees of two US-based software companies who are based in Bengaluru and Hyderabad. It aspires to sign comparable agreements with 10–12 additional businesses in the upcoming year. The company claims that because it concentrates on unicorns and accounts for exit timetables of at least two years, its business model is "cushioned" against market volatility. As founders, we currently fund the majority of the company with equity. Later on, we will do it using structured financing, according to Agarwal.
Oyo Rooms, Exotel, FarEye Technologies, Wow! Momos, Aarav Unmanned Systems (AUS), Uniphore, Sugar Cosmetics, Vahdam Tea, Karza Technologies, and Vista Rooms are a few companies in which Agarwal has made notable investments. Oyo Rooms, Get My Parking, FarEye Technologies, Vista Rooms, Uniphore, Exotel, Aarav Unmanned Systems (AUS), Zip Dial, Karza Technologies, Rubix Data Sciences, and Earth Rhythm are only a few of Shroff's personal investments.
The two invested Rs 30 crore in the creation of ESOPDhan, of which roughly Rs 20 crore has been lent. The plan is to use up all of the money that are on hand before turning to structured debt to raise further funding for the company's operations. "We are confident that we can obtain additional monies as needed, therefore we are not concerned about the funding. In around four weeks, we'll start raising structured debt "Agarwal stated, but he did not provide a precise loan amount.
Structured debt is the preferred route for the company as the payouts to lenders will be structured as and when ESOPs are liquidated, Agarwal explained. ESOPDhan, he said, is aiming at a Rs 500-crore loan book by 2025, helping more people buy stock options being offered by their employers. At times, employees find it difficult to subscribe to ESOPs soon after vesting because funds are not available for paying the vesting price and income tax.
ESOPDhan has been working to solve that problem for employees, and in the process also facilitating a healthy employer-employee relationship. Exercising their stock options early helps employees with lower taxes on the sale of stocks, an attractive proposition for them, he said. The company claims that there is a significant unmet demand because the vested ESOPs of Unicorns in India total more than USD 10 billion.
In terms of demand, he declared, "We are not concerned." The company will maintain a laser-like focus and solely finance ESOPs by unicorns in the face of macro uncertainties that are shaking the market and the startup ecosystem (with the USD 1 billion valuation and above). Focusing on unicorns gives ESOPDhan the assurance of a "easy exit" from such funding at some point in the future via the IPO option. ESOPDhan, a non-banking finance firm authorised by the Reserve Bank of India, uses unique technologies to decide which projects to support.
The startup began with ESOPDhan sponsoring 5 India-based workers of Harness, a company with a US$3.7 billion valuation whose platform aids businesses in accelerating their Cloud ambitions and quickening the release of software improvements. The startup began with ESOPDhan sponsoring 5 India-based workers of Harness, a company with a US$3.7 billion valuation whose platform aids businesses in accelerating their Cloud ambitions and quickening the release of software improvements. The following group of 10 employees from Phenom, a US-based AI-powered HR-tech platform with a USD 1.37 billion market cap, were supported through ESOPDhan. Phenom makes it possible to uncover talented individuals, assists job seekers in finding the ideal position, and optimises HR strategy, process, and cost.
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