Bengaluru-based B2B e-commerce unicorn Zetwerk has announced the addition of fresh employee stock options worth around $64 million (₹541 crore) under its ESOP Plan 2018. This marks the first ESOP expansion by the company this year and also indicates its interest in motivating employees as it gears up for an IPO.
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The company’s board has sanctioned an amendment to its Employee Stock Option Plan, adding 1,25,03,900 new stock options. Each option will convert into equity shares, increasing the total value of Zetwerk’s ESOP plan to around ₹1,145 crore or approximately $136 million. This increase marks a whopping 90% rise in the company’s ESOP pool, indicating a strategic focus on employee retention and motivation at a critical phase of its growth.
Founded by Amrit Acharya, Srinath Ramakkrushnan, Rahul Sharma, and Vishal Chaudhary in 2020, Zetwerk has fast emerged as a prominent name in the B2B e-commerce space. It connects buyers with suppliers to provide manufacturing jobs, through partnerships with offline suppliers, which are involved in several manufacturing processes, including fabrication, machining, casting, forging, and galvanizing of machine parts.
Gross revenue at Zetwerk has risen an impressive 53% to ₹17,564 crore in FY24 from ₹11,448 crore in FY23. Still, the company did not report its net income for the fiscal year-a piece of information that investors scrutinize very closely.
The ESOP expansion comes after a successful fundraising round where Zetwerk raised $90 million, led by Khosla Ventures with participation from The Schiehallion Fund, valuing the company at approximately $3.1 billion. This influx of capital not only strengthens Zetwerk’s financial position but also paves the way for its anticipated IPO, which aims to raise $1 billion. The company has reportedly started negotiating with investment bankers to support the public offering, signaling the company’s proactive measures toward scaling its operations and presence in the market.
The competitive landscape for Zetwerk comprises such names as Infra.Market, OfBusiness, and Moglix, all of which are also competing for market share in the fast-evolving B2B e-commerce sector. As these companies continue to innovate and expand, Zetwerk’s strategic decisions, such as the recent ESOP expansion, may enhance its capacity to attract and retain the best talent, a necessary component for maintaining growth momentum.
This expansion of ESOPs is reflective of the larger industry trends under which companies are increasingly shifting towards equity compensation as an instrument for aligning the interests of employees with the companies’ performance. Such approach not only motivates but also brings a sense of ownership to the employees; this is particularly useful for high-growth environments.
The more the company prepares for its IPO and expands its operations, the better the chances are that it will be able to successfully implement its ESOP plan by bringing onboard skillful professionals who are motivated to work for the realization of its vision. Strategic focus on employee engagement through equity participation may well play in favor of Zetwerk in the competitive B2B landscape.
All things considered, fresh additions to Zetwerk’s pool of ESOP worth $64 million form a critical piece in the company’s growth story while gearing up for an IPO. The company witnessed strong revenue growth and substantially expanded its pool of ESOP and is well set to further its lead position in B2B e-commerce space.
