Porter Hits Unicorn Status, Logistics Startup Soars to $1 Billion Valuation
Employee Stock Magic, Porter's ESOP Pool Boosts Valuation to Unicorn Level
17 May 2024
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Kunal Tyagi
Porter, backed by Tiger Global, achieved a $1 billion valuation in a friends and family round, becoming the third unicorn in India this year.
Porter's valuation doubled from its 2021 $500 million mark, driven by a significant revenue increase to Rs 1,754 crore in FY23.
The ESOP liquidation at a premium rate highlights Porter's growth, benefiting employees and enhancing ESOPs' role as a key compensation tool.
Porter, a logistics services provider backed by Tiger Global, has ascended to unicorn status following a recent friends and family round. This round involved individuals purchasing shares from the company's employee stock ownership plan (ESOP) pool, achieving a valuation of $1 billion. According to Moneycontrol, 15-20 investors acquired shares worth Rs 25 crore in this latest funding effort. This significant milestone marks Porter as the third unicorn in India this year, joining the ranks of AI startup Krutrim and B2B SaaS company Perfios.
Unicorns are privately held companies valued at $1 billion or more, and India is home to about 106 of them. Porter's leap to unicorn status is noteworthy, particularly given the substantial increase in its valuation. The company's valuation has doubled since its last fundraising round in 2021 when it was valued at $500 million. Founded in 2014, Porter has secured around $150 million in funding from prominent investors such as Tiger Global, Peak XV Partners, Kae Capital, the Mahindra Group, and Lightrock.
What makes this secondary round remarkable is that it occurred at a premium rather than a discount, a rarity in such transactions. Typically, secondary deals see shares sold at a discount of 25-30% from the last primary valuation. However, Porter's leadership decided on a valuation of $1 billion, reflecting strong confidence in the company's growth trajectory. This decision was bolstered by a robust increase in revenue, which more than doubled to Rs 1,754 crore in FY23 from Rs 848 crore in FY22.
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This isn't the first time Porter has successfully conducted a friends and family round. Earlier, in the first quarter of 2023, the company sold shares from its ESOP pool worth Rs 7-8 crore at a valuation of $700 million. The company's consistent ability to command premium valuations during ESOP liquidation events highlights its impressive growth and market confidence. According to sources, Porter's annual recurring revenue (ARR) has increased 3-4 times since the last ESOP liquidation, justifying the subsequent valuation increases.
Porter, co-founded by Pranav Goel, Uttam Digga, and Vikas Choudhary, focuses on optimizing last-mile delivery operations for businesses by providing on-demand light commercial vehicles (LCVs). The company has been expanding its service offerings, including running an intra-city courier service using two-wheelers. This diversification of revenue streams has been instrumental in driving its growth and enhancing its valuation.
The recent increase in Porter's valuation during the ESOP liquidation event is also beneficial for its employees, who see significant rewards for their contributions. ESOPs have become an effective tool for attracting and retaining top talent in the startup ecosystem. Between 2021 and 2023, ESOP cashouts led to $1.46 billion in wealth for startup employees, according to data from Qapita. This shift underscores the growing importance of ESOPs as a wealth multiplier and a critical component of compensation packages in the competitive startup landscape.
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