Unacademy’s ESOP reckoning, Kriti Sanon’s New Bet, and Mswipe’s Big Win

Unacademy’s ESOP crisis isn’t really about a 30-day window. It’s about what happens when a startup stops being a growth story and starts becoming a clean-up operation - and who ends up paying for that transition.

In December 2025, Unacademy announced that former employees would have just 30 days to exercise their vested ESOPs. Earlier, they had 10 years. Miss the deadline, and the equity would lapse. The backlash was immediate. Former educators, engineers, and operators said the same thing publicly: “We don’t have ₹5-10 lakh to pay tax on shares we can’t sell.” That wasn’t exaggeration, it was arithmetic.

Unacademy’s valuation has fallen from $3.4 billion in 2021 to roughly $300 million today, a 90% markdown. It has raised $800+ million, much of it with investor protections that ensure preference shareholders get paid first in any exit. Founder Gaurav Munjal’s explanation was technically correct: in a distressed acquisition, ESOPs often end up worthless. By forcing employees to convert options into shares now, they at least remain on the cap table and could receive equity in the merged entity, reportedly upGrad.

On paper, that sounds protective. In reality, it shifts risk from the company to individuals.

India’s ESOP tax framework makes this especially brutal. The moment employees exercise ESOPs, they owe tax on the perquisite value - even though the shares are illiquid and privately held. For many Unacademy employees, this meant an immediate ₹1-7 lakh tax bill, payable within 30 days, for equity that still may never generate liquidity. No cash-in, only cash-out.

That’s why employees called it coercive. You either pay now and hope the deal works, or you walk away from equity earned over years. There is no neutral choice.

What made this worse was context. Unacademy is not out of cash. It reportedly still has ₹1,200 crore on its balance sheet. This wasn’t a survival move - it was a deal-cleanliness move. A simplified cap table makes acquisitions easier. Once again, employee risk was traded for transaction convenience.

We’ve seen better playbooks in India itself. Flipkart runs annual ESOP liquidity windows; in 2025 alone, it executed a $50 million buyback benefiting thousands of employees. Razorpay allowed structured secondaries for current and former staff. OYO, during COVID, offered voluntary ESOP repricing instead of forced exercises. These companies understood a simple truth: employee trust is balance-sheet capital.

Global parallels make Unacademy’s choice look even harsher. In the US, down rounds trigger transparent 409A revaluations. Equity pain is visible and phased, not suddenly imposed. When GitHub was acquired by Microsoft, employee equity was cleanly converted and honoured because the acquirer underwrote the risk. Even Stripe, after valuation resets, used voluntary tender offers, not deadlines.

Unacademy chose compression - of time, options, and trust.

This is also a governance problem. Indian ESOPs have weak protections. Exercise windows can be changed with board approval. There’s no mandatory employee disclosure standard, no representation, no enforcement. DPIIT’s tax deferral scheme exists, but applies to only ~250 startups, and many unicorns skip it due to compliance friction.

Could this have been handled better? Yes. A phased exercise window. Company-supported tax funding. Voluntary liquidity before M&A talks leaked. A protected ESOP pool in acquisition terms. All of these cost money, but far less than the reputational damage now unfolding.

This episode will outlive Unacademy’s balance sheet. Employees across the ecosystem are watching. So are founders and investors.

When startups fail gracefully, they protect people. When they fail tactically, they protect cap tables. One builds ecosystems. The other quietly erodes them.

Let’s go through what else is happening in Indian startup world - Grab your simmering cup of StartupChai.in and unwind with our hand-brewed memes.

“Kheloge Kudoge Toh Banoge Nawab”: Kriti Sanon Invests In D2C Supplement Brand Supply6

Actor Kriti Sanon has invested in D2C nutrition startup Supply6 and joined on as its brand ambassador, bringing celebrity muscle to the brand’s everyday wellness pitch.

As Supply6 sells daily nutrition sachets, zero sugar electrolyte mixes, and protein wafers aimed at quick, no drama health consumption, with the startup having earlier raised $1.1 Mn in pre seed funding from Zeropearl VC, Kunal Shah, Ashutosh Valani, and others.

Read more here

“Manzoori Mil Gayi”: Mswipe Gets Payment Aggregator License For Online & Offline Payments

Fintech firm Mswipe Technologies has secured the final payment aggregator license from the Reserve Bank of India, clearing it to process both online and offline payments and aggregate multiple payment instruments for merchants.

A milestone that arrives over two years after its in principle approval in August 2022 and nudges the company closer to its plan of building an in house online payment gateway.

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“Hum Saath Saath Hai”: Cautio Acquires BYTES To Provide Safety Solutions For Two-Wheelers

Road safety startup Cautio has acquired BYTES to build a full stack safety platform with a sharper focus on two wheelers, a segment often left out of serious safety tech conversations.

Founded in 2023, BYTES brings a vision based, AI powered system that enables real time risk detection and ADAS for two wheelers. Following the acquisition, the BYTES team will integrate into Cautio’s R&D unit.

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1. Fintech advisory startup PowerUp Money has raised $12 Mn or about ₹107 Cr in a Series A round led by Peak XV Partners, with participation from Accel, Blume Ventures, Kae Capital, 8i Ventures, and DeVC, reinforcing investor confidence in its mutual fund focused advisory model.

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2. Home décor brand MagicDecor, operated by Printpanda India, has raised an undisclosed strategic investment from Pidilite Ventures to accelerate growth across manufacturing, technology, and distribution. The company plans to expand its production footprint, upgrade print and finishing lines.

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3. E-mobility startup Entuple E-Mobility has raised ₹13 Cr in a funding round led by Varanium Capital, with participation from existing investor Blue Ashva Capital along with HNIs and family offices including Mohit Oswal of Roop Automotives. The capital will support Entuple’s push to scale its deeptech electric powertrain.

   Read more here