Bengaluru, NFAPost: Unacademy, an edtech startup founded in 2015 by Gaurav Munjal, Roman Saini and Hemesh Singh, has laid off around 1,000 employees. This has opened up questions on the scope of India’s education startup which are widely seen an investment destination.
According to sources familiar with the development, about 600 of the staff were asked to leave last week from Unacademy group firm including Prepladder, CodeChef, Graphy and Relevel.
The decision to reduce employees stems from the company’s decision cut costs amid an impending slowdown in venture funding and tightening of the overall economic environment. Unacademy was valued at $3.4 billion when it raised $440 million led by Singapore’s Temasek last year in August.
Commenting on the development, Arvian Resarch said the move to reduce staff strength from around 7000 can be viewed as a measure to reduce cash burn of the company and focus on its core business of two products like the core test preparation business and the job-tech vertical of Relevel.
“Company had made reevaluation of its various employee positions and found that some of them are redundant and can be merged with some existing position. This is supposed to give new structuring for sales and business development functions,” said Arvian Research.
The company wants to reduce the number of contractual employees. This will help the edtech company to achieve profitability by the end of the current calendsr year and achieve growth for various group companies.
According to sources familiar with the financial structure of the company, Unacademy’s monthly burn rate recently touched about $15 million.
Unacademy’s cost-cutting exercise is aimed at focussing on core businesses. It therefore decided to The company already closed its skilling programme for kids Mastree and its K-12 businesses.
Commenting on the company’s financial performance, sources said Unacademy closed the calendar year 2021 with a revenue of around Rs 1,000 crore. The company has set a revenue target of Rs 1,700 crore for 2022.
