Yubi, the fintech unicorn formerly known as CredAvenue, made a big move by adding fresh Employee Stock Options worth a whopping $26 million; let’s dive into the details and see what it holds for the company and its employees.
PC: Medial
Yubi matches businesses looking for loans with financial institutions and other investors. Their offerings also include vendor and dealer financing and a marketplace for bonds, including access to primary and secondary bonds. Quite a neat setup, all of which aids businesses in raising funds for growth.
On the board of Yubi, a special resolution has been approved for adding 22,00,000 employee stock options to its new and existing plans, thereby increasing it to a whopping 60,08,920 options. That is a lot of stock options. They have added 11,00,000 new stock options to the existing 2022 ESOP plan to 4,908,920 options in all. Added to this, they have come up with a new 2024 ESOP plan with another 11,00,000 options. These numbers are straight from their regulatory filing accessed through the Registrar of Companies.
This pool of ESOPs will, therefore, grow appropriately to allow for the welcome and retention of top talent. In one of the most competitive industries for FinTech, a proper ESOP plan goes a long way. Ownership in the company instills employees with not only a sense of ownership but can be a big factor in motivation. Estimates by TheKredible state that newly added ESOP options amount to about $26 million while the company’s total ESOP plan now hits $70 million.
The rise of Yubi to unicorn status is quite impressive. They reached unicorn status in March 2022 after the $135 million Series B round led by Insight Partners, Dragoneer Investment Group, and B Capital Group. Valuation had reached $1.5 billion only last year after a secondary sale. With this deal, it is pretty obvious that Yubi is on a growth path, and these new ESOPs are part of their strategy to maintain the momentum.
Not all is quite so rosy, however. Though Yubi’s revenues almost doubled to Rs 328 crore in FY23, the company saw its losses increase more than eightfold to Rs 482 crore during the same time. The Bengaluru-based firm has not disclosed annual financial statements for FY24 and, as such, it will be interesting to see how things shape up.
Apart from their ESOP news, Yubi has been pretty active in the market. In July, it led a Rs 150 crore debt round for Infra.Market and participated in a debt round for Auxilo. These actions prove that Yubi isn’t just sitting around; they’re out beating the bushes, looking for opportunities through which they can grow and extend their influence within this space.
This is an uncomfortably loud and clear message, showing respect for its team and its readiness to invest in its future. ESOPs can be a great retentive tool and help in motivating staff, particularly in the fast-moving space of FinTech. It also mirrors confidence in the growth prospects at Yubi and seeks to build a strong base for the future.
This will be a great benefit for the employees. Stock options could form a significant part of the compensation package of an employee and, in the long run, deal with a lot of money. That is why it is a win-win situation: top talent is engaged and retained in the company, while employees get to participate in the company’s success.
This Yubi move to add $26 million in new ESOPs is bold and strategic. This is one of the uncompromising commitments to growth, with heavy belief placed in the power of a motivated, highly engaged workforce. As they keep wading through the challenges and opportunities within this FinTech space, it would be quite interesting to watch how this dividend of investment into the team comes out.
