Accel-backed Dezerv completes ₹46 Cr ESOP buyback program.

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Wealthtech startup Dezerv has successfully completed its Employee Stock Ownership Plan (ESOP) buyback program, allowing employees to liquidate vested stock worth ₹46 crore (approximately $5.3 million). This move benefits both current and former employees, reinforcing the startup’s commitment to wealth creation for its team. Despite not disclosing the exact number of participants, Dezerv emphasizes that this initiative aligns with its core values and long-term vision. The ESOP buyback follows a $32 million funding round led by Premji Invest, Accel, Elevation Capital, and Z47. With over ₹6,000 crore in managed assets, Dezerv continues to expand its footprint in the Indian wealth management sector.

ESOP buybacks have become a crucial tool for Indian startups, with more than 23 companies offering such programs in 2023 alone, generating ₹1,448 crore in cumulative wealth for employees. Companies like Swiggy and Urban Company led the way with ESOP liquidity programs worth $65 million and $24 million, respectively. Dezerv’s latest move underlines a growing trend of startups rewarding employees and strengthening retention strategies.

1. Understanding Dezerv’s Business Model and Growth

1.1 How Dezerv Works

Dezerv is a wealth management platform that provides curated investment solutions tailored for senior working professionals and high-net-worth individuals (HNIs). The company simplifies investment decision-making by leveraging data analytics, expert advisory, and an intuitive digital platform.

1.2 Revenue Model

Dezerv earns revenue through:

• Management Fees: Charges for managing client investments.
• Subscription Plans: Premium services for advanced portfolio management.
• Partnerships: Collaborations with financial institutions for exclusive investment opportunities.

1.3 Funding Background

Since its inception, Dezerv has secured multiple funding rounds. In 2023, the company raised $32 million in a funding round led by Premji Invest, with participation from Accel, Elevation Capital, and Z47. This round valued the company at approximately $205 million.

1.4 Founders and Their Vision

Dezerv was founded in 2021 by:

• Sandeep Jethwani
• Sahil Contractor
• Vaibhav Porwal

All three founders bring extensive experience in investment management and wealth advisory. Their mission is to democratize wealth management by providing personalized and efficient investment strategies to professionals and HNIs.

2. The Significance of the Dezerv ESOP Buyback

2.1 Employee Wealth Creation

The Dezerv ESOP buyback allows employees to convert their vested stock options into liquid cash, offering financial security and additional incentives to stay with the company.

2.2 Industry Trends in ESOP Buybacks

ESOP buybacks have gained popularity as a reward mechanism for employees. In 2023, over 23 startups participated in ESOP liquidation programs, generating ₹1,448 crore for more than 3,000 employees in India.

2.3 Notable ESOP Buybacks in India

• Swiggy: $65 million ESOP liquidity program.
• Urban Company: $24 million ESOP liquidity event.
• Even Healthcare: $500,000 ESOP buyback.

3. Dezerv’s Financial Performance

3.1 Revenue Growth

In FY24, Dezerv reported an operating revenue of ₹26.25 crore, marking a 157% increase from ₹10.20 crore in FY23.

3.2 Profitability Challenges

Despite revenue growth, Dezerv recorded a net loss of ₹74.53 crore in FY24, up 95% from ₹38.20 crore in FY23. This is primarily due to increased investment in technology, talent acquisition, and marketing efforts.

4. The Future of Dezerv and ESOP Trends

4.1 Expansion Plans

Dezerv aims to expand its product offerings and enhance its AI-driven advisory platform. The company is also exploring partnerships with financial institutions to introduce new investment avenues.

4.2 ESOP Buybacks as a Retention Strategy

Startups are increasingly using ESOP buybacks to retain top talent. Companies that provide liquidity options to employees often see higher retention rates and improved job satisfaction.

5. Learning for Startups and Entrepreneurs

5.1 Employee-Centric Culture

Providing liquidity to employees through ESOP buybacks enhances trust and loyalty, making it easier to retain skilled professionals.

5.2 Sustainable Growth vs. Profitability

While rapid growth is essential, balancing revenue with operational costs is crucial for long-term sustainability.

5.3 Investor Confidence

Funding rounds and ESOP buybacks indicate strong investor confidence, which can help startups attract further investments.

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