Hissa has unveiled Hissa Fund I, a $35 million investment vehicle to tackle liquidity challenges in India’s ESOP market. The fund helps employees of growth-stage startups convert their vested stock options into cash, providing an alternative to the long wait for exits through IPOs or acquisitions.
Launched by Bengaluru-based Rulezero, Hissa is an equity management platform founded in 2019 by Satish Mugulavalli and Srinivas Katta. The platform streamlines ownership data management, automates share issuance and ESOP processes, tracks and certifies cap tables, and manages transactions.
According to Mugulavalli, founder of Rulezero and managing partner of Hissa, Indian startups often remain private for 10-12 years, leaving employees with valuable but illiquid stock options. Hissa Fund I, a SEBI-registered Category II Alternative Investment Fund (AIF), provides a secondary transaction platform with T+5 settlement cycles, enabling employees to access liquidity for personal needs.
“The idea is simple: if an employee earns INR 100 in salary and INR 50 in options, we allow them to liquidate a small portion of those options periodically. This builds trust in the value of their equity without making them feel the need to leave prematurely,” Mugulavalli said.
The fund will target 15-20 high-potential startups, collaborating with founders to synchronize liquidity events with business expansion and talent retention strategies. This approach enables companies to use ESOPs to attract and retain top talent.
“We target growth-stage companies—typically Series B or later—and purchase employee shares,” Mugulavalli said. According to him, this provides liquidity while allowing companies to retain talent without incurring high compensation costs.
The fund’s first transaction involved Miko, an AI robotics company that offered liquidity to 32 employees.
Mugulavalli also mentioned that approximately 28-30% of the fund has already been raised, mainly from domestic founders and high-net-worth individuals (HNIs). He anticipates the fund will be fully closed by the end of 2025.
