GoKwik, a digital commerce startup supported by Peak XV Partners, Z47 Partners, RTP Global, and Think Investments, has modified its ESOP Plan 2021. According to Inc42, which examined an internal document, the amendment adds a non-compete provision targeting nine specific rivals. The list includes Razorpay, Shiprocket, CRED, Cashfree Payments, BiteSpeed, Snapmint, WebEngage, Shopflo, and Pine Labs. If staff join or interact with these firms, the startup can cancel their stock options.
Inc42 reported that the new rule allows the Board or Nomination and Remuneration Committee to revoke both unvested and vested-but-unexercised options. This decision rests with the committee, which determines if a "Competitive Breach" occurred. The restriction covers all grants, including those issued before the amendment, and binds former employees for two years after they leave. The policy was shared with staff in August, coinciding with the departure of senior figures like vice president Sneha Rao and product head Siddhartha Bahl. While passive investments in public stocks are exempt, the phrase "otherwise associate" remains vague, potentially covering relationships beyond direct employment.
Siddharth Manchanda, a partner at JSA Advocates & Solicitors, told Inc42 that naming specific rivals in an ESOP policy is unusual. He noted that while most plans allow options to lapse upon breach of employment agreements, GoKwik’s approach directly links rival association to the cancellation of vested shares. Another lawyer spoke to by Inc42 suggested the change could face legal challenges, as altering terms to disadvantage existing holders raises validity questions. The enforceability of such non-compete clauses in Indian law remains unsettled.
GoKwik released a statement claiming former employees could see 9X average returns on their ESOPs and that the firm turned EBITDA positive in October 2026. Inc42 observed that this release did not address the specific forfeiture concerns raised by staff. The startup, founded in 2020, has raised $68 million and reported approximately ₹250 crore in revenue for FY25, though financial disclosures indicate consolidated operating revenue of ₹146.2 crore. As employees weigh new job offers against the risk of losing outstanding options, the provision’s impact will be tested when an employee with vested shares moves to one of the nine named rivals.