After a pandemic-driven boost over the last couple of years, the balloon seems to have burst for EdTech companies in India. Both Unacademy and Vedantu, who became unicorns recently, have laid off a good percentage of their employees in the last couple of months. Now, Gaurav Munjal, co-founder and CEO of Unacademy, has written to the company's workforce about the trials ahead.
Munjal has predicted a "funding winter" that he says might last up to 18 months. Ominously, he added that the company will cut costs whenever required to weather through the dry spell and continue being profitable, reported IANS. He added that, according to predictions by others, this "funding winter" might last up to 24 months. Among these cost cuts include incentives for Unacademy educators, all of which, Munjal said, are not linked to revenue and have been completely removed or are in the process of being removed completely. He went on to urge employees to travel only if it is unavoidable and rely on Zoom meetings as much as possible.
Profitability at all costs was the mantra shared by Munjal in the letter to the employees. "Winter is here. We must change our ways. We will focus on organic growth channels instead," he wrote, as reported by IANS. Unacademy is funded by SoftBank and Tiger Global.
In order to combat the impact of schools reopening and the world gradually returning to physical education, the EdTech platform recently announced its foray into physical tuition and coaching centres. This is a move that, arguably, India's biggest EdTech platform BYJU's has already taken. Munjal stressed the need to "adapt", in his letter. "We must survive the winter. Every test prep category that we run must become profitable in the next 3 months. Unacademy centres should be profitable in FY'23," he wrote.
Apart from lay-offs by some of the leading EdTech companies, this year has also seen Lido Learning, which was backed by noted entrepreneur Ronnie Screwvala, being forced to shut operations, leaving its 1,000-odd employees stranded.
