Exampur delays pay, holds dues to ex-staff for months after UpGrad calls off buyout

In the process of scaling down, Exampur’s workforce went down from about 650 in January to close to 200 employees as of date. While Exampur laid off some employees, others left the company due to the delay in salaries.

Test prep startup Exampur has stopped paying staff salaries and held off full and final settlements to former employees for months, four people aware of the development told Moneycontrol. The revelation comes almost a year after UpGrad shelved its acquisition plans.

According to multiple sources, the company has not paid salaries to most of its employees for months with backlogs going as far back as July. Exampur has also not made the full and final settlements to many of the employees who departed this year, they said.

“There was a potential acquisition that did not work for us and we had to scale operations down because we were running out of funds. We could have stopped the operations, maybe eight months back when there were no liabilities. It was an easy thing to do. But we wanted to continue so we sold our personal holdings and mortgaged our belongings… There were months where salaries were delayed during this time,” Vardaan Gandhi, founder of Exampur, told Moneycontrol.

In August, edtech unicorn upGrad acquired Exampur for an undisclosed amount. However, according to media reports that followed, the acquisition fell through due to a conflict in alignment of business and valuation of Exampur in the deal. Gandhi added that UpGrad remains on Exampur’s cap table without sharing details on the shareholding pattern.

Founded in 2018 by Gandhi and Vivek Kumar, Noida-based Exampur offers over 200 test preparation courses for government jobs where most of the content is delivered through the company's more than 24 YouTube channels, with a user base of over 10 million students, it said back in 2022.

Gandhi told Moneycontrol that the company which ran 24 channels till the beginning of 2023 scaled down to nine after the acquisition fell through. He added that it shuttered about 15 channels as they were still making losses and with depleting funds it could not afford continuing them.

“Out of these nine channels, we used to get 97 percent of our revenue. Only those channels have been cut down, which were not giving us revenue but we were just building them for next two to three years. We wanted to continue running all the channels but seeing the circumstances, I don’t think it would have been possible for us to survive if we went on with it,” said Gandhi.

This came in a year when investor scepticism towards edtech coupled with an overall funding winter pushed many startups on the brink of collapse. To be sure, the funding to Indian edtech companies dramatically plummeted to $712 million in 2023, down from $5.33 billion in 2021, according to data by Tracxn. Many companies made severe cuts in costs and let go employees in an attempt to increase their cash runway with uncertainty on the next round of funding.

In the process of scaling down, Exampur’s workforce went down from about 650 in January to close to 200 as of date. While Exampur laid off some employees, others left the company due to the delay in salaries.

According to the data on EPFO website, the company only paid provident fund to 30 employees in November. This number has been declining from 61 since July this year. Gandhi clarified that a part of the 200 employees are contractual employees and not on the company’s payroll, without divulging further details on the bifurcation.

Gandhi claimed that the company will be able to pay the entire dues off in the next three to four months as it has become cash positive. In FY23, the company booked a profit of about Rs 15 lakh on a topline of Rs 23.62 crore.

Exampur expects to pay off the December salaries and then offer its existing employees to either convert the accrued amount into equity or pay the cash off by the end of February.

As for the former employees, the company plans to pay off the entire amount in the next three to four months with the first tranche of payment to be made by January 31. “We have committed to everyone that we will be paying interest on the due amount considering it as a fixed deposit with the company so that they do not miss out on anything,” he said.

In addition, Gandhi said that the company is making efforts to raise a new round which will take another four to five months to close. Back in November 2021, the company had raised from a consortium of Singapore-based angel investors, including current and former executives of Coca Cola, Vivendi, Citibank, Qualcomm and Interpublic group.