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Time to cut costs as funding winter can last up to 18 months: Unacademy CEO
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As edtech platforms start bleeding in India, Unacademy, which recently laid off over 600 employees, has predicted a funding winter that can last as long as 18 months, saying it will cut costs wherever required to weather the dry spell and become profitable.
In a letter to employees, Unacademy's co-founder and CEO Gaurav Munjal said that "we must learn to work under constraints and focus on profitability at all costs".
"Winter is here. We must change our ways. We will focus on organic growth channels instead," he wrote.
Backed by SoftBank and Tiger Global, online learning platform Unacademy last week announced its foray into opening physical tuition centres across the country, following BYJU's footsteps.
"Some people are predicting that this [funding winter] might last 24 months. We must adapt. This is a test for all of us. We must learn to work under constraints. We must focus on profitability at all costs,a Munjal told employees.
"We must survive the winter".
Munjal said that the company has "significantly reduced our brand marketing budget," and "we will focus on organic growth channels instead".
"Every test prep category that we run must become profitable in the next 3 months. Unacademy centres should be profitable in FY'23," he added.
Munjal said that all incentives for educators that are not linked to revenue have been completely removed or are in the process of getting completely removed
"Travel only if it is absolutely needed. Meetings that save travel cost and that can happen on Zoom should happen on Zoom," he added.
The online education space is shrinking with India reopening amid the 'hybrid normal'.
Edtech platforms are seeing a significant dip in the demand for online learning and some of such firms have either shut shops or fired employees in recent days.
After post-Covid tremors at Unacademy and BYJU's-owned WhiteHat Jr, another edtech major Vedantu recently laid off over 400 employees.
In a nightmare for nearly 1,000 employees, homegrown edtech startup Lido Learning which is backed by top entrepreneur Ronnie Screwvala, shut operations in February this year.
