Edtech unicorn upGrad has called off the acquisition of government test-prep startup Exampur, a deal that was announced in August 2022.
According to two sources close to the development, who spoke to businessline on the condition of anonymity, this has led to a portion of upGrad Jeet employees (companies’ test prep segment) being asked to voluntarily resign as the company could not find positions for them in the group. These impacted employees have been offered 3 months of mediclaim extension, notice period pay, and support in job search.
Earlier this year, upGrad initiated the process of merging the teams of its own test-prep vertical upGrad Jeet with Exampur, as a result of which many upGrad Jeet employees shifted base from Bengaluru to Noida.
In a statement to businessline, upGrad said, “We categorically denied any cutbacks over team strengths at One upGrad very recently. In the last 60 days, we have added over 2,000 to our team strength, and just in the last 2 weeks, we have remained as a net hirer of 200.”
One of the sources quoted above said that there were some disagreements over the valuation of Exampur which lead to the falling out of two companies. “Earlier the two companies have agreed on a ₹300 crore valuation but later there were talks of Exampur valuation being around ₹240 crore because of low revenue, which potentially led to the fall out.” According to upGrad’s August statement, Exampur was on track to close revenue of ₹70 crore this fiscal.
However, Exampur co-founder, Vardhan Gandhi said, “Our revenue was the same at which the term sheet was proposed. There was a difference in the business lines. upGrad is more enterprise-business focused and we are very enthusiastic about Test-prep. This is the only reason why deal has been called off.”
upGrad also confirmed that it has put the acquisition of Exampur on hold. “We are extremely focused on Adult Learning presently and have taken a strategic call to hold with our Exampur partnership for now, and are happy to re-evaluate this in the future. There have been no disagreements on the valuation with Exampur,” the company spokesperson added.
The edtech major further clarified that as it consolidates all M&As - which includes upGrad Jeet, there will be an ongoing assessment of both - profile redundancy and performance, but between now and March 2023, One upGrad will add another 500 employees to its team strength across India. In November, upGrad has announced plans to merge all its M&As in India into ‘One upGrad’ and the integration process is expected to complete by March-June 2023.
Founded by Ronnie Screwvala, Mayank Kumar, And Phalgun Kompalli, upGrad has been on an acquisition spree this year. In addition to Exampur, it announced four other acquisition deals in 2022 including Centum Learning, WOLVES Recruitment firm, Harappa, and Insofe.