After closing a new friends and family round in which investors purchased shares from the employee stock ownership plan (ESOP) pool at a USD1 billion valuation, Porter, a logistics services provider funded by Tiger Global, became a unicorn, people familiar with the situation told a credible source.
A privately held business valued at $1 billion or more is known as a unicorn. In India, there are around 106 unicorns. After B2B SaaS firm Perfios and AI startup Krutrim, Porter is the third unicorn of the year.
According to one of the people mentioned above, a total of 15 to 20 people purchased shares in Porter for Rs 25 crore in the last round.
Porter's valuation has doubled since the round's closing compared to the $500 million it raised in its 2021 round. The firm was founded in 2014 and has raised over $150 million in total from investors, including Lightrock, the Mahindra Group, Tiger Global, Peak XV Partners, and Kae Capital.
The fact that the company's secondary round occurred at a premium rather than a discount makes it noteworthy in addition to most other secondary deals. In secondary transactions, current shareholders sell their shares to a different investor in order to avoid having the money go to the business.Porter may have been valued less than $500 million since, in the majority of situations, investors value the firm at a discount of at least 25–30 percent from its most recent primary valuation when shares exchange hands during a secondary transaction. The leadership did, however, settle on a $1 billion valuation.
A robust top line is another factor contributing to the value increase. The greater valuation is probably justified by the company's sales, which more than doubled to Rs1,754 crore in FY23 from Rs848 crore in FY22.
Porter has liquidated its ESOP pool and received a premium over its previous valuation on previous friends and family rounds. Similar to the present round, the corporation sold friends and family shares from its ESOP pool around Rs 7-8 crore in the January–March quarter of 2023, valued at $700 million, according to sources.
The leadership's confidence in Porter's ability to expand is reaffirmed by the most recent round. One of the individuals cited above told Moneycontrol, "Pierce's annual recurring revenue (ARR) has increased 3–4X since the previous ESOP liquidation event, which also justifies the back-to-back increases in valuation."
Porter declined to comment on this article. Providing on-demand light commercial vehicles (LCVs), the logistics service was founded in 2014 by Pranav Goel, Uttam Digga, and Vikas Choudhary. It assists businesses in optimizing last-mile delivery operations. It has been growing its activities, such as by operating a two-wheeler intra-city courier service to diversify its sources of income.
Porter's employees benefit greatly from an increase in valuation during an ESOP liquidation event since they are generously compensated for their contributions to the company's growth. In recent years, ESOPs have emerged as a powerful instrument for luring top personnel.
Between 2021 and 2023, ESOP cashouts resulted in the transfer of $1.46 billion in wealth to startup workers, as per statistics from Qapita, an equity management platform. In fact, most employees today use ESOPs as a wealth-multiplier, which is a change from a few years ago when they were essentially worthless. Many modern initial public offerings (IPOs), such as Zomato, Paytm, and Delhivery, have together altered the way that employees see ESOPs.
