The SoftBank and Tiger Global-backed online learning platform predicts a dry funding spell across the industry for as long as 18 months, and one of the high-profile Indian startups has urged its employees to learn how to work under constraint and focus on reaching profitability.
The Bengaluru-headquartered startup, which has raised over $800 million and was valued at $3.44 billion in its most recent financing round in August, always raised more money than what was needed.
He wrote in the email that "but now we must change our ways." The contents of the email were obtained and reviewed.
The winter is here.
Some people think that this might last 24 months. We have to adapt. This is a test for all of us. We have to learn to work under constraint. He wrote in the email that we must focus on profitability at all costs.
He said that we must survive the winter.
After a 13-year bull run, investors across the globe have sounded alarms, urging portfolio founders to plan for the worst after a sharp reversal in tech stocks. According to the first report, Y Combinator advised its startups to raise additional capital if they can get a runway of about two years. Lightspeed and Sequoia have similar suggestions.
Many of the startups that raised capital at peak valuations are struggling to raise new capital as investors become more cautious and the good old due diligence makes a comeback. Several VCs who were in advanced stages of talks to back a startup a few weeks ago are changing their prices.
In the next few months we will open Unacademy Centres in various parts of
Our online Subscription Product recently crossed 800,000 Active Paid Subscribers.
And while that’s awesome, there is a segment of Learners who prefer going Offline specially in JEE and NEET.
— Gaurav Munjal (@gauravmunjal) May 18, 2022
As schools and other institutions open again and reverse some of the fast and wide adoption online platforms witnessed during the Pandemic, edtech startups across India and many other markets are grappling with additional challenges.
Unacademy, Vedantu and Lido have all reduced their workforces in recent months to eliminate redundant workers and improve their financial performances. Byju, India's largest edtech, was attempting to go public via the SPAC route as early as last month and seeking a valuation of over $40 billion but has since postponed the plans, according to a source familiar with the situation.
Munjal emphasized in the email that Unacademy's new goal is to reach profitability and generate free cash flow. In recent months, Unacademy has taken steps such as shutting the K-12 offering and winding down some areas where it had expanded to cut costs and risk exposure.
The firm is undertaking several other steps.
We have significantly reduced our brand marketing budget
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
Businesses like Relevel and Graphy which are blitzscaling mode must become extremely mindful about burn and reduce it significantly
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
We can only achieve this goal if we all work towards it.
Gaurav Munjal, founder and chief executive of Unacademy, a high profile Indian startup, has urged employees that they "must learn to work under constraint" and "focus on profitability at all costs" in a candid email. pic.twitter.com/V0USqx3PZE
— Manish Singh (@refsrc) May 26, 2022
All Rights Reserved © 2024
