Unacademy announces Rs 50 crore ESOP buyback

The edtech firm Unacademy has unveiled a ₹50 crore buyback initiative for its employee stock ownership plan (ESOP), aimed at enhancing liquidity for its employees, according to co-founder Gaurav Munjal. This move comes as the company embarks on a significant strategic overhaul in light of a sustained downturn in the edtech sector, which has cooled following the pandemic boom. Munjal shared the news on X, highlighting that a select group of employees will benefit substantially from the buyback. Notably, eight employees are projected to receive payouts exceeding ₹1 crore each, while 17 individuals will earn more than ₹50 lakh, and 38 employees are expected to collect over ₹10 lakh from this initiative. Expressing gratitude towards the board for allocating funds for this purpose, Munjal acknowledged the challenges posed by current valuations, which fall short of those from previous fundraising efforts. Over the upcoming weeks, the company plans to reach out to eligible employees to facilitate their involvement in the buyback program. This announcement follows Unacademy’s recent clarification regarding the terms for exercising ESOPs. The company had introduced a one-time, 30-day window allowing former employees to exercise their vested stock options. However, Munjal noted that the present valuation is lower than prior funding rounds, and preference shareholders will take precedence over equity holders, potentially impacting realized returns. As part of its restructuring strategy, Unacademy is shifting from company-operated offline learning centers to a franchise model, aimed at cutting costs and enhancing financial efficiency. Additionally, the startup is actively seeking consolidation opportunities to better navigate the challenging market landscape. Discussions for a potential acquisition with upGrad recently fell through, as both parties could not agree on valuation terms.