SoftBank-backed Unacademy increases ESOP pool by 20%

File image: Unacademy founders Roman Saini, Gaurav Munjal and Hemesh Singh

SoftBank-backed edtech unicorn Unacademy has increased its employee stock ownership plan (ESOP) pool by 20 percent, according to the company's regulatory filings with the Ministry of Corporate Affairs (MCA).

Unacademy has increased the ESOP pool size to 286 million options from 238.7 million options, the regulatory filings showed. The edtech unicorn had issued bonus shares in April to all eligible employees, thus increasing its ESOP pool to 238.7 million options from 99.5 thousand options.

News agency Inc42 first reported the development, saying that Unacademy expanded its ESOP pool to $393 million, citing sources. Unacademy declined to comment.

Unacademy's move to increase its ESOP pool comes at a time when the company laid off over 750 employees including educators, in a bid to cut costs amid a potential funding winter for India's startups. Gaurav Munjal, Unacademy's co-founder and chief executive, in a letter to employees had said that they should learn to work 'under constraints.'

Munjal had also said that all the non-core incentives to employees will be phased out with the company focusing more on profitability. However, the company is expanding its offline operations rapidly across the country, especially in Kota. Moneycontrol had exclusively reported earlier this week that Unacademy spent Rs 100 crore on hiring 30 educators in Kota, over the last two months.

ESOPs making headlines again

ESOPs offered by startups in India are regaining significance over the last two months with many unicorns and startups either buying back ESOPs to incentivise employees or expanding their ESOP pool.

In May, business-to-business (B2B) payments and neobanking platform Razorpay had said that the company was looking to get new investors on board through a share sale of $75 million by its employees.

Last week, food and grocery delivery platform Swiggy had said that it will be buying back shares worth $23 million issued under its employee stock option program (ESOP) from about 900 employees in a bid to incentivise them.

iD Fresh Food also announced its seventh round of ESOP tranche worth Rs 46 crores for 27 staff members.

To be sure, startups were going slow on ESOP expansion in the first four months of 2022 after unicorns including Nykaa, Paytm and Zomato that got listed on the stock exchanges last year, faced shareholder dissent on their ESOP programs.