Unacademy has approved a Rs 50 crore ESOP buyback program, creating liquidity for employees at a time when the company’s valuation remains below its last funding round.
Co-founder and Group CEO Gaurav Munjal announced the development on X, stating that the board carved out a dedicated cash pool for employees despite the lower valuation environment.
According to Munjal, the buyback will create eight employee crorepatis. Seventeen employees will receive more than Rs 50 lakh each, while 38 employees will earn over Rs 10 lakh through the exercise. The company plans to reach out to eligible employees in the coming weeks.
Liquidity Amid Valuation Reset
The buyback comes after months of scrutiny around Unacademy’s ESOP policies. Earlier, the company faced criticism for shortening the ESOP exercise window. In response, Munjal clarified the rationale behind the decision and later introduced a one-time 30-day window for former employees to exercise vested options.
At the time, Unacademy cautioned employees that its current valuation sits below previous funding levels. It also reminded stakeholders that preference shareholders would have priority over equity holders in any distribution of proceeds.
Against that backdrop, the Rs 50 crore buyback signals an effort to restore confidence and reward long-term contributors.
Strategic Reset in a Slowing Edtech Market
The ESOP announcement aligns with a broader restructuring effort inside the company.
India’s edtech sector expanded rapidly during the pandemic, fueled by a surge in demand for online learning. However, growth has since slowed. Funding has tightened, and companies now face pressure to improve profitability and unit economics.
In response, Unacademy has shifted away from company-operated offline centers and moved toward a franchise-based model. The transition aims to lower fixed costs and stabilize margins.
At the same time, the company explored consolidation. In December, Munjal confirmed acquisition discussions that later emerged to involve upGrad. The talks did not result in a transaction, as both sides failed to agree on valuation terms.
Balancing Incentives and Discipline
By launching the ESOP buyback, Unacademy attempts to balance capital discipline with employee retention. Liquidity events in startups typically occur during funding rounds or public listings. In a slower funding cycle, structured buybacks offer an alternative mechanism to compensate employees holding paper wealth.
The Rs 50 crore allocation does not change the company’s valuation trajectory, but it redistributes value internally at a critical time.
As the edtech sector recalibrates, Unacademy’s next phase will depend on sustainable revenue growth, disciplined cost management, and strategic clarity across online and offline models.
