Unacademy-Owned PrepLadder Faces Legal Action From Teachers Over Nonpayment Of Dues

Test prep platform PrepLadder, owned by edtech unicorn Unacademy, is facing legal action from a group of teachers over nonpayment of dues. The group of teachers have moved the Delhi High Court against the SoftBank-backed edtech unicorn.

The primary petition against PrepLadder was filed by Dr Vivek Jain, who taught preventive and social medicine on PrepLadder. Dr Jain moved the Delhi HC over nonpayment of royalty fees in December 2022.

After the Delhi HC admitted Dr Jain’s petition on December 23, 2022, both parties sought a deferral of the hearing to seek an out-of-court settlement, court documents reviewed by Inc42 showed. Justice Yashwant Varma, who is hearing the case, granted till January 11, 2023, for the parties to settle.

After Dr Jain and PrepLadder failed to reach an agreement, the court scheduled the hearing of the case on February 1, 2023; as the Unacademy-owned test prep platform sought two weeks to file a response to Dr Jain’s petition.

According to a Moneycontrol report, Dr Jain and a few other doctor-teachers have not been paid for their content on PrepLadder since September. 

The group then decided to terminate their contracts for the year beginning April 2023 due to reduced pay and allegations of cheating against the platform. PrepLadder has continued to sell the content created by the concerned group of teachers, having suspended payments to these teachers.

On the other hand, the aforementioned report cited an Unacademy source stating that the payments were disputed as PrepLadder was awaiting responses to the notices sent to the group of teachers for their lack of content contribution. Inc42 could not independently verify the same.

However, the ongoing issue at PrepLadder is the mass exodus of doctor-teachers over pay cuts. While the test prep platform has been trying to cut costs, its educators are supposedly leaving for more lucrative opportunities.

Inc42 has reached out to Unacademy and PrepLadder, and the story will be updated as and when the company responds.

Founded in 2015 by Deepanshu Goyal, Sahil Goyal and Vitul Goyal, PrepLadder offers recorded content for medical students preparing for the NEET PG exams. Since then, it has diversified into providing content for the preparation of other exams such as CAT and UPSC, along with the Foreign Medical Graduate Examination (FMGE) and multiple super speciality examinations.

Unacademy picked up PrepLadder in July 2020 for $50 Mn. In FY22, the test prep platform recorded around INR 115 Cr in revenue and posted a loss of INR 144 Cr.

PrepLadder is just one of Unacademy’s other acquisitions that have also seen trouble recently. Earlier this month, Relevel fired 40 employees, as the startup pivoted from its core education business to a test product business.

Unacademy has been trying to achieve profitability as the edtech market has been impacted after schools and coaching institutes reopened in early 2022. 

However, it has fired more than 1,500 employees since the start of 2022 in a bid to cut costs and become profitable, following the likes of other edtech majors such as BYJU’S and Vedantu in laying off employees, having scaled up rapidly in 2021 off the back of the pandemic-induced edtech rush.