Outschool, a marketplace for kid-friendly, virtual after-school programs, has laid off 31 people. A period of rapid raising for Outschool led to the layoff last month. After hitting a $1 billion valuation just four months earlier, the firm raised its Series B, C and D in a single year.
Outschool grew from an early-stage startup into a growth stage company using the capital. The company said it had attracted over 100 million bookings on its platform. The need to staff up quickly to meet demand grew from 25 employees to 163. The co- founder said that market conditions have rapidly changed.
The need to be more defensive went into the second half of the year. It was one of the most difficult decisions I have had to make in my career, but we have tried to do right by some amazing people.
The layoffs affected all teams, including those at the VP level, to ensure that operations continue to be optimal. 75% of the employees joined in the last two years.
Out school said that it was a very generous package. The company claims that it has over three years of runway.
The difficulties of being a growth-stage company that wants to serve children were put in the spotlight by the layoffs. When I asked Nathoo about the clash of incentives between venture and its core clientele, he said that "we've been venture funded from the very start, and I hope our actions, and how we go about our work reflects our values..."
Outschool’s after-school enrichment marketplace is now valued at $3 billion
Outschool has shifted its focus to enterprise deals through schools. In the next five years, the company hopes to get more employers and schools to sign up.
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