The COVID-19 pandemic-led hyper-growth stage for EdTech companies in India seems to have finally reached the stage of course correction. Bengaluru based EdTech start-up Vedantu announced, this week, that it will be laying off 400 employees, amounting to about seven per cent of its workforce.
In a Blogpost addressing the employees, Vedantu's co-founder Vamsi Krishna stated that a cash crunch due to the ongoing war between Ukraine and Russia, and the current downward trend in stocks, globally, resulted in the decision. "With COVID tailwinds receding, schools and offline models opening up, the hyper-growth of 9x Vedantu experienced during the last 2 years will also get moderated. For long-term sustenance of the mission, V (Vedantu) would need to adapt too," said Krishna, in his message.
A source from Vedantu tells EdexLive that the move is in the interest of "cost-optimisation" to deal with the current global financial situation. The reopening of schools has, of course, had an impact on the surge in numbers these companies had seen in the last two years. Vedantu, which had become yet another unicorn EdTech start-up from India last year, had also recently launched its patented Ai Live technology that provides live environment impetus to recorded classes, at discounted rates no less. It is also this model that has reduced the need for resources at the moment and is an example of the cost-optimisation that Vedantu aims to do, added the source.
While expressing regret at the decision, Krishna adds that health benefits to the employees who are being laid off and their families will be extended up to August 5, 2022, and discounts on their pharmacy bills will continue up to April 29, 2023. Looking ahead, Krishna said that they will work towards reducing the cost of customer acquisition and review the ongoing projects the company has undertaken.
However, Vedantu isn't the only EdTech start-up struggling with the course correction that the market is going through. Another platform, Lido Learning, which was backed by noted Indian entrepreneur Ronnie Screwvala, had it worse when it was forced to shut down operations earlier this year for similar reasons. Unacademy, which is one of the more seasoned players in India's EdTech market, also laid off 6oo employees recently.
This week, Unacademy announced that it was venturing into offline coaching, with the first of its planned string of centres set to come up in Kota in June. These centres will offer coaching for competitive exams, such as NEET and JEE. A source at the company also tells EdexLive that offline coaching will also be offered for the Common Universities Entrance Test (CUET), as Unacademy already offers online coaching for the same. With its foray into offline coaching, the EdTech start-up aims to enrol at least 15,000 students in the very first batch, said a press release by the company.
While such course correction puts to doubt claims that the future of education in India will be online, there seems to be hardly any reason to ring alarm bells for the EdTech boom in India just yet.
