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Unacademy announces Rs 50 Cr ESOP buyback

EntrackrEntrackr · 13d ago
Unacademy announces Rs 50 Cr ESOP buyback
Medial

Edtech company Unacademy has initiated a Rs 50 crore ESOP buyback programme to offer liquidity to its employees, according to the company’s co-founder, Gaurav Munjal. Announcing the development on X, Munjal said that eight employees are expected to make over Rs 1 crore each through the buyback, while 17 employees will receive more than Rs 50 lakh, and 38 employees are likely to earn over Rs 10 lakh. “Grateful to the board for carving out a cash pool for the employees, even though the valuation is significantly lower than our last fundraise,” Munjal said, adding that the company will reach out to eligible employees over the next few weeks to participate in the programme. Munjal had recently clarified the company’s stance on ESOP exercise terms and valuation. Unacademy introduced a one-time 30-day window for former employees to exercise their vested stock options, while cautioning that the current valuation is lower than previous funding rounds and that preference shareholders have priority over equity holders. Unacademy is undergoing a strategic reset as the edtech sector faces headwinds after the post-pandemic boom. Recently, the company announced plans to shift from company-run offline learning centres to a franchise-based model to cut costs and improve unit economics. The company has also explored consolidation opportunities. However, recent talks between Unacademy and upGrad over a potential acquisition were called off after the two sides failed to agree on valuation terms.

Tata Digital rolls out Esops for its senior execs to push performance

Economic TimesEconomic Times · 1y ago
Tata Digital rolls out Esops for its senior execs to push performance
Medial

Tata Digital has introduced an employee stock option plan (Esop) for its senior executives as part of a performance-oriented culture push. The plan was approved at the company's recent annual general meeting and includes a minimum vesting period of three years. The Esop is tied to strategic goals of revenue growth, enhancing consumer experience, and achieving profitability. The response from employees has been mixed. Tata Digital's CEO, Naveen Tahilyani, has been rehauling the senior leadership, and the changes are expected to take at least six months to show results. The company is also facing integration challenges with BigBasket and 1mg, but has plans for external funding in the future.

Whatfix rolls out $58 Mn liquidity event for employees and investors

EntrackrEntrackr · 1y ago
Whatfix rolls out $58 Mn liquidity event for employees and investors
Medial

Whatfix, a digital adoption platform (DAP), has introduced a $58 million liquidity program for its employees and investors. This marks the company’s fourth buyback of employee stock options (ESOPs). The Bengaluru-based company stated that eligible current and former employees now have the chance to sell a portion of their vested units at a premium over the earlier Series D valuation. This announcement comes on the heels of the company’s recent $125 million Series E funding round, led by Warburg Pincus, with contributions from existing investor SoftBank Vision Fund 2. Consequently, the firm’s valuation increased to $900 million from $600 million during Series D fundraise. It has raised over $265 million to date Whatfix introduced its first employee stock ownership plan or ESOP buyback scheme worth $4.3 million in July 2021. The firm did not announce the other two buybacks in the media. Founded by Khadim Batti and Vara Kumar, Whatfix provides in-app guidance and performance support for web applications and software products. Its tools are used by large companies to drive efficiency. The company asserts that it has been awarded five patents by the US Patent Office, with an additional 18 patents in the works. Despite facing macroeconomic challenges over the past two to three years, Whatfix claims to have kept its cash burn low while sustaining growth. The firm has doubled its workforce to over 960 employees, and has opened four new offices in Singapore, Germany, Australia, and India since its Series D funding round. This is the second largest ESOP buyback in 2024. In July, IPO-bound food delivery and quick commerce firm Swiggy announced an ESOPs liquidity programme worth $65 million. In the ongoing calendar year, Urban Company, MyGate, Classplus, Meesho, The Sleep Company, XYXX, Purplle, Dehaaat, Leverage Edu, Pocket FM and Adda247 bought back ESOPs from their employees.

Unacademy’s Gaurav Munjal clarifies on ESOP exercise and valuation

EntrackrEntrackr · 2m ago
Unacademy’s Gaurav Munjal clarifies on ESOP exercise and valuation
Medial

Unacademy’s Gaurav Munjal clarifies on ESOP exercise and valuation Test preparation platform Unacademy has amended its employee stock option plan (ESOP) for former employees where they can now exercise their options within 30 days of exit, compared to 10 years earlier. According to an official communication sent to exited employees, the company’s board has approved a one-time 30-day window from the effective date of the revised plan. Former employees can exercise all vested options earned during their tenure. The email also noted that, under applicable Indian tax laws, the exercise of vested options would trigger an immediate tax liability for employees. Unacademy said the valuation used for exercising ESOPs is based on its latest assessment by a merchant banker, which values the company at around Rs 2,650 crore (approximately $230 million). The company added that this valuation is lower than the total capital invested by its investors and cautioned that there is no assurance any future liquidation event would generate sufficient proceeds for payouts to equity shareholders, including employees who choose to exercise their options. It further stated that preference shareholders have superior rights over equity shareholders. Earlier, Unacademy co-founder Gaurav Munjal had publicly said that the company’s valuation may have fallen sharply to below $500 million from its peak of around $3.5 billion in 2021. Unacademy raised $440 million in 2021 in a funding round led by Temasek Holdings, which valued the company at about $3.4 billion. In a statement shared by Munjal, he said the company is currently in merger and acquisition discussions at a similar valuation of around Rs 2,650 crore through an all-stock deal with no cash component. He said that since the valuation is well below the over $800 million raised by Unacademy, certain investors would be entitled to apply liquidation preference, which could effectively render ESOPs worthless. Munjal added that when liquidation preference is enforced, employee stock options effectively become zero, and that the management did not want that outcome. “The board was therefore requested to explore a mechanism that would allow exited employees to convert their options into common shares so they could participate in any stock-based merger, even at a lower valuation, providing parity with common shareholders,” said Munjal. He also said his own ESOPs are subject to the same outcome and acknowledged responsibility for the situation.

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