200 cr ESOP buyback announced by Meesho

Meesho, a prominent player in the horizontal e-commerce landscape, has unveiled its largest-ever Employee Stock Ownership Plan (ESOP) buyback program, valued at Rs 200 crore (approximately $25 million). This initiative marks a significant milestone for the company, demonstrating its commitment to rewarding its workforce and fostering a culture of ownership.

This move represents Meesho’s fourth buyback endeavour, following previous buybacks of shares worth $1 million in February 2020, $5 million in November 2020, and $5.5 million in October 2021. With this latest buyback, approximately 1,700 current and former employees, from junior-level executives to senior leadership, stand to benefit.

Meesho’s core mission is to empower small businesses, including SMBs, MSMEs, and individual entrepreneurs, by providing access to a vast customer base, a diverse selection of products across 30 categories, pan-India logistics solutions, payment services, and robust customer support.

Under the leadership of Vidit Aatrey, Meesho has recently introduced Valmo, a comprehensive logistics marketplace that enables micro-entrepreneurs within its network to serve as Meesho logistics partners. This initiative further strengthens Meesho’s ecosystem and enhances its capabilities to support the growth and success of small businesses.

In a notable achievement, Meesho declared profitability in July 2023, positioning itself as the first horizontal Indian e-commerce company to achieve this milestone. Since then, the company has sustained its profitability and positive cash flow trajectory. Furthermore, Meesho slashed its losses by 48% in FY23 while experiencing a remarkable 77% year-on-year revenue surge, amounting to Rs 5,735 crore in the previous fiscal year.

The significance of employee stock ownership extends beyond Meesho, as evidenced by the recent implementation of an employee stock buyback program by MyGate, a community management app benefiting over 50 employees and according to data compiled by TheKredible, the total ESOP buyback, payout, and liquidity across various companies amounted to nearly $802 million in 2023, reflecting a substantial commitment to employee ownership and wealth creation. Notably, this figure marks a significant increase from the $440 million recorded in 2021 and the $200 million recorded in 2022, underscoring the growing emphasis on employee equity participation and retention in the corporate landscape.

In conclusion, Meesho’s announcement of its most extensive ESOP buyback program signifies a strategic investment in its workforce and reaffirms its dedication to fostering a culture of ownership and long-term growth. This initiative, coupled with the company’s sustained profitability and innovative endeavours, underscores Meesho’s position as a trailblazer in the e-commerce ecosystem, driving meaningful impact for small businesses and stakeholders.