Flipkart’s sprint in valuation has led to huge wealth creation for its employees, making millionaires out of them.
Flipkart, India’s largest online retailer, is expanding its business with every possible options, and its 400 employees, who have stock options with e-commerce site, have been hitting the “crorepati” jackpot too.
A person who is knowledgeable about the employee stock option scheme at Flipkart said, “About 400 of the employees who own a stake have now become crorepatis.” This stock option received $1 billion funding last month, which sets the value at $7 billion. It has been reported that almost one-fourth of the retailer’s 7,000 full-time employees own a stake in the company.
At the senior level too, around 20 employees are now dollar millionaires, which means their stock options are worth at least Rs 60 million on papers. Flipkart denied to divulge further details of this report. This wealth creation has been resulted by the retailer’s huge leap in its valuation. In 2012 the value of the company was $850 million and at that time it raised $150 million. In just two years, valuation of the company has increased by eight times. 32-year-old Sachin Bansal, Flipkart’s co-founder and CEO, said, “While we are competitive when it comes to salaries, Esops offer the opportunity for wealth and value creation.” He also said, “It’s a long-term reward for those who believe in the future of Flipkart.”
Following the path of the IT services industry, e-commerce is the next big thing for employees who want to create wealth faster, as told by Anshuman Das, managing partner at Longhouse Consulting, a recruitment firm working with start-ups. Several junior employees at Flipkart also hold large stakes in the company. This kind of financial investment has helped employees like 29-year-old Ambur Iyyappa, “I was getting married in 2012 and the convert allowed me to take care of my wedding expenses.” This graduate from Annamalai University, who is a senior manager of customer operations, declined to provide details of the number of his shares.
After the acquisition of fashion e-retailer Myntra.com, Flipkart employees sold shares of the company. Myntra provides Esops to its 600 core employees, who work in technology and marketing divisions. Iyyappa said, “Esops are a motivation for us employees…It is how the company recognizes our work.”
