Circles.Life offers to buy back US$5m in employee options

DIGITAL telco Circles.Life is offering to buy back US$5 million in employee stock options ahead of a planned initial public offering.

This comes as more South-east Asia startups explore ways to allow staff to partially cash out share options earlier in a bid to retain talent.

In a press statement on Monday (Dec 13), Circles.Life said it holds these employee stock ownership plan (ESOP) liquidity events every 18 months on average. The last round was completed in July 2020.

This time, employees who have been in the company for more than a year can participate, if they wish to. Circles.Life employees receive 2 months' base pay worth of stock options, on top of their basic salary component and performance bonus, the company said.

The company's annual cohort of top performers are awarded an additional 6 months worth of stocks vested immediately, it added.

Circles.Life said that employee stocks awarded in the earliest days have "grown over 13-fold in value". The company's Singapore unit raised US$48.9 million in Series C funding, which valued the company at a post-money valuation of US$544.4 million, according to data from VentureCap Insights. It announced an undisclosed round of funding from Warburg Pincus in Feb 2020.

BT in your inbox

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign Up

Sign Up

"These funding and valuation numbers do not accurately reflect the full picture including our global operations, and additional rounds of funding since February 2020. Given the current market conditions, we're actively reviewing various strategic options but can't comment on specific plans. The company will provide more updates in due course," said a Circles.Life spokesperson.

Circles.Life is not the first startup in South-east Asia to offer stock option buybacks for its employees. In April, fintech startup StashAway announced that it would offer to buy back up to S$4 million in employee options, as part of a US$25 million Series D funding round led by Sequoia Capital India. The startup has over 100 employees across 5 markets.

Similarly, in September last year, Carousell allocated "a few million dollars" for an ESOP buyback, on the back of its US$80 million fundraising deal led by South Korea's Naver Corp.

The number of buybacks and secondary sales of ESOPs is likely to rise, as the region's startup ecosystem matures and valuations of tech companies increase.