Unacademy launches ₹50 crore Esop buyback after two-year turmoil

Edtech firm Unacademy has initiated a ₹50 crore employee stock ownership plan (Esop) buyback, offering liquidity to employees at a time when the company’s valuation has fallen significantly below its 2021 peak.

“Grateful to the Board for carving out a cash pool for the employees even though the valuation is significantly less than our last fundraise,” co-founder and chief executive Gaurav Munjal said in a post on X on Friday.

The buyback signals an attempt by the company to reward and retain talent after two years of turmoil owing to the founders’ plans to exit the firm.

According to Munjal, eight employees will receive over ₹1 crore each under the programme, 17 will receive more than ₹50 lakh, and 38 more than ₹10 lakh. The company will reach out to employees over the coming weeks to facilitate participation, he added.

Experts said the increasing use of Esop buybacks following valuation corrections reflects a more structured response by startups to employee liquidity and retention concerns.

“Esop buybacks are not merely a goodwill gesture, but a capital structuring decision that impacts the balance sheet, cap table and minority shareholder rights,” said Sonam Chandwani, managing partner at corporate advisory KS Legal & Associates, said.

“While they can serve as an effective retention tool, they must be executed transparently and positioned within a broader governance framework, particularly in companies emerging from valuation stress,” Chandwani added.

Unacademy had earlier revised its Esop policy to require former employees to exercise vested stock options within 30 days of departure drawing criticism. The company subsequently reinstated its earlier policy, allowing former employees to exercise options for up to 10 years.

Tough times

The Temasek-backed firm has faced a difficult internal environment over the past two years. In November, upGrad had proposed a share-swap deal valuing Unacademy at $300–400 million, sharply below its $3.4 billion peak valuation in 2021.

The talks fell through earlier this month. Separately, upGrad has continued its acquisition strategy and recently acquired a 90% stake in Internshala through a stock transaction.

Multiple sales discussions involving Unacademy have failed amid a gap between seller expectations and buyer pricing in a weaker private market.

Munjal recently told employees that the company is shutting down company-operated offline centres and transitioning them into franchise partnerships as it pivots back to an online-first model.

Plans to hive off Airlearn, its AI-led language learning vertical, have also been dropped, with both co-founders, Munjal and Roman Saini, staying back at the firm.

Unacademy has conducted at least three Esop buybacks previously, in 2019, 2020, and the last during edtech’s peak in 2021, buying back roughly $10.5 million ( ₹75–80 crore) worth of stock options from employees and educators.

Sonam Chandwani, managing partner at corporate advisory KS Legal & Associates, said

“ESOP buybacks are not merely a goodwill gesture, but a capital structuring decision that impacts the balance sheet, cap table and minority shareholder rights,” she said. “While they can serve as an effective retention tool, they must be executed transparently and positioned within a broader governance framework, particularly in companies emerging from valuation stress.”