Mumbai : Edtech Unicorn Unacademy has become the latest startup preparing for a funding winter to wind down a global business unit, cut pay for founders and top executives, and slash complimentary meals and snacks.
In an internal email titled Frugality, founder Gaurav Munjal pointed to a lack of efficiency within the organization and the need to cut costs.
“Even though we have more than Rs 2,800 crore in the bank (till this morning), we are not efficient at all. We spend crores on travel for staff and teachers. Sometimes it is needed and sometimes not. There are a lot of unnecessary expenses that we incur. We should cut all these expenses. We have a strong core business. We must become profitable as soon as possible,” wrote Munjal.
Munjal pointed out that the management and founders have already taken pay cuts and will shut down businesses that are not meeting the target. “We will close some businesses that have failed to find product-market fit (PMF) such as the Global Test. preparation.”
Munjal said the decision to do away with non-core privileges and perks for CXOs, including free lunches for drivers and employees, was made keeping in mind the company’s objective.
“We have to do an initial public offering (IPO) in the next two years. And, we have (to have) cash flow positive. For that, we should adopt frugality as the core value,” the note said.
The founder also said that his firm will not renew its association with the Indian Premier League (IPL) in 2023.
“The last three years with the IPL were amazing. Our brand has taken another level. I recommend all upcoming brands to partner with IPL. Our focus has changed. Hence the decision not to do IPL next year”, tweeted Munjal.
Unacademy declined to comment on emailed questions.
This is Munjal’s second message to employees in the last two months.
In May, Munjal had warned employees of working under “constraints”, citing the dangers of a potential “financing winter”.
“We are looking for a time where at least for 12-18 months the funding gets exhausted. Some people are predicting that it may go on for 24 months,” Munjal had said on May 26.
Unacademy is owned and operated by Sorting Hat Technologies Pvt. Ltd. has increased its Employee Stock Ownership Plan (ESOP) pool by 20%, increasing the pool size from 238.7 million options to 286 million options, regulatory filings showed.
In April, the edtech firm laid off about 600 employees, comprising about 10% of its workforce, Mint’s sister publication VCCircle reported.
In March, Unacademy laid off more than 100 employees of its PrepLadder team amid a “restructuring” of the organization, and last month, it asked 150 more employees to leave following a performance improvement plan.
Earlier this month, Mint reported that startups are shying away from engaging in bonus and stock options offers in addition to shortening the notice period, as they conserve cash to navigate a funding slowdown.
Instead, many layoffs are hiring from an available pool of employees, where they are prepared for more layoffs. Unacademy is currently valued at $3.44 billion and counts global venture capital firms, including Sequoia Capital, Tiger Global Management and SoftBank, among others, as its backers.
In June, Unacademy forayed into offline education by opening two coaching centers in Kota, as most edtech companies begin building their offline presence across India amid a slowdown in the sector after two years of hypergrowth as the Covid-19 curbs ease. has been given and the students have returned. for physical classes.