Unacademy to accelerate ESOP vesting period by one year as it skips cash appraisals

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SoftBank-backed Unacademy has decided to expedite the vesting period of employee stock options (ESOP) by one year for all its staff in an effort to compensate employees who will not be receiving cash appraisals this year.

"For options that are getting vested before August 31, 2024 acceleration will happen and vesting will be done immediately (or as soon as you complete 1 year). Vesting of the remaining unvested options will be preponed by 1 year," Gaurav Munjal, co-founder and CEO of Unacademy told his employees in an internal Slack communication.

"This is only applicable for people who are active employees of the company and are not on notice period. This is applicable for Unacademy, Graphy, NextLevel and Cohesive. This is not applicable for Founders and Management of Companies that we acquired since we have a separate Agreement for that," Munjal added.

Unacademy declined to comment on a query sent by Moneycontrol.

In February, Munjal had said that Unacademy will not be giving employees a cash appraisal for FY24 (2023-24) adding to a long list of cost-cutting initiatives the edtech has taken in the last 15 months to prioritise profitability amid worsening funding winter.

Since the beginning of 2022, Unacademy has faced significant scrutiny due to a series of challenges, including repeated instances of mass layoffs and unsuccessful new initiatives. The company has also been focusing a lot on profitability and has thus cut down its monthly burn to a tenth, Moneycontrol previously reported.

Founded in 2015 by Munjal, Roman Saini and Hemesh Singh, Unacademy provides an online learning platform for preparation of various competitive tests. The company has raised $877 million in funding to date and was last valued at $3.4 billion, when it raised $440 million from Temasek, General Atlantic, and others in August 2021.

In FY22 (2021-22), Unacademy reported operating revenue of Rs 719.3 crore, and a loss of Rs 2,847.9 crore, making it one of the biggest loss-making unicorns in India.

The company is also anticipating slower growth in the current financial year, which may put pressure on its valuation, especially as one of its direct competitors, PhysicsWallah, is eyeing 6x growth this year, and is looking to raise at least $250 million at a valuation of $3.3 billion. PhysicsWallah is eyeing revenue of about Rs 1,200 crore, which will be more than Unacademy's anticipated revenue of about Rs 1,100 crore.