Fintech startup Esopdhan eyes Rs 500 crore loan book to fund ESOP buys

Financial services startup ESOPDhan on Sunday said it is aiming at a Rs 500 crore loan book by 2025, helping many more people buy stock options being offered by their employers.

So far, ESOPDhan has lent Rs 20 crore to 15 Bengaluru and Hyderabad-based employees of two US-based high growth tech companies.

Set up by veteran investors Shravan Shroff and Nitin Agarwal, the firm seeks to ease the acquisition of stock options by employees of high-growth SaaS startups.

'Our experience with startup teams over the years threw up many concerns of employees rewarded with ESOPs. We understood their difficulties, came up ESOPDhan as a solution and decided to unveil its offerings,' said Shroff.

At times, employees are unable to subscribe to ESOPs soon after vesting because of lack of funds or lack of clarity on tax treatment of the same.

ESOPDhan has been working to solve that problem for employees, and in the process also facilitating a healthy employer-employee relationship.

The startup will work with identified late-stage high growth companies with a growing customer base. It has already tied up its fund requirement to scale it to Rs 500 crore, Shroff said.

The business started with ESOPDhan funding five India employees of Harness (harness.io), a $3.70-billion valuation company that helps companies accelerate their Cloud initiatives and roll out software developments faster.

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The next set of 10 India employees that ESOPDhan funded belonged to Phenom, a US-based AI-powered HR-tech platform valued at $1.37 billion.

'ESOPDhan team shared tax benefits of exercising my vested ESOPs early while helping me with funds to exercise my stock options,' says Vikas Naiyar, who worked with Harness.

Pooja Singhal, a software professional from the same company who and availed the ESOPDhan loan, said: 'For those working in unlisted companies with ESOPs as part of their compensation plan, ESOPDhan loan is a great alternative to exercise their options.'

Industry estimates the value of vested ESOPs by employees of Indian Unicorns till date to be more than $10 billion.

The value of vested ESOPS is expected to grow at a fast rate in the coming years.

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