Unacademy | PrepLadder App: Mumbai court restrains Unacademy parent from using PrepLadder app

On Monday, responding to a petition filed by Sri Lankan edtech startup Medical Joyworks, LLC, Justice AH Laddhad passed an ex-parte order against Sorting Hat Technologies Pvt., the parent company of Unacademy, and its investors—Blume Venture Advisors, Sequoia Capital India, SoftBank Vision Fund and Temasek Holdings—restraining the company from using the PrepLadder app till further notice.

In July last year,
Unacademy had acquired PrepLadder for $50 million in a cash-and-stock deal. Its founders Deepanshu Goyal, Vitul Goyal, and Sahil Goyal along with its 250-member team had joined Unacademy. ET reported on August 2 that Bengaluru-based Unacademy
raised $440 million in a new round of funding valuing the firm at $3.4 billion. PrepLadder is an online learning platform for exams including NEET-PG and FMGE, CAT, UPSC, GATE, IIT JEE, among others.

“The court passed an order in which Unacademy, PrepLadder…have been restrained from using the PrepLadder application and website—as well as their content in their entirety— until all proprietary information, know-how, and technology belonging to Medical Joyworks has been removed to the satisfaction of Medical Joyworks and an independent auditor,” said the Sri Lankan startup in a post on its website.

The court in its order, a copy of which was reviewed by ET, has observed that the plaintiff (Medical Joyworks) can claim compensation after assessing the loss, if any.

“We are grateful to the court for granting an injunction order to protect our rights, and for acting swiftly and decisively regarding this matter,” Dr. Nayana Somaratna, CEO and cofounder of Medical Joyworks, said in a post on the company’s website. “We will continue our lawsuit in the hopes that a satisfactory resolution that honors our work, our customers, and the broader medical community will be achieved.”

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The Sri Lankan startup has claimed that it had provided comprehensive evidence (to the court) detailing how PrepLadder had been systematically replicating, altering, and presenting as their own Medical Joyworks’s proprietory information, know-how, and technology.

When contacted, Amit Vyas, partner at the law firm Vertices Partners, who appeared for the Sri Lankan edtech startup along with advocate Pardeep Gandhy, confirmed the development but refused to divulge any details since the matter is subjudice.

“PrepLadder Pvt Ltd and Sorting Hat Technologies Pvt Ltd are in receipt of a communication from the advocates of Medical Joyworks LLC stating that an ex-parte interim order in the Bombay City Civil Court has been passed against them,” said an Unacademy spokesperson. “We are in the process of reviewing the relevant documents. We will be deciding on our next course of action (including protecting our rights and interests) in consultation with our legal advisors.”

Queries emailed to the spokespersons of SoftBank, Blume, Sequoia and Temasek did not immediately elicit responses. This story will be updated as and when they do.