OYO rooms, The second most valuable start-up of India founded by Ritesh Agarwal in 2013 is a hospitality chain under Oravel Stays Pvt Ltd. The company is known for attracting millions of investments from top-notch investors like Softbank, Hero enterprise, Lightspeed venture partners, Sequoia capital and Innoven capital. The most recent one is from Singapore based company Grab worth $104 million.
Evert start-up up has its own struggles, long working hours and hence requires loyalty of employees during tough times. The Employee Stock Option Plan (ESOP) is primarily the way used by OYO and many other start-ups as compensation to employees. This allows employees to own stocks of their respective company which can be bought back later by the company and its investors.ESOPs are awarded on the basis of employee contribution, role and potential. However, ESOPs have lost their charm over time due to the failure of start-ups in finalizing buybacks as actually monetary returns to employees.
OYO has decided to reward its former and current employees this new year. It is expected that an existing investor of the company (name unannounced) will buy back such ESOP from multiple employees. The plan will start in January with 40-50 crores and go up to $150-200 million in the next few years. Around 250 employees are speculated to benefit from this initiative. It must be noted that OYO stocks are now 5 times worth their value three months ago due to the latest investing developments.
The time when OYO employees would party as Citrus Pay employees did in Phuket in 2016 due to rewarding Buybacks is not far away. An example would be how a normal office staff of Paytm became 20 lakh richer due to buybacks in January 2018. Indeed, the OYO offices are definitely a happy place right now.