Edtech startup Unacademy, which recently let go over 600 staff, has predicted a funding freeze that might last up to 18 months, claiming that it will cut costs wherever necessary to weather the storm and return to profitability, reported IANS. “We must learn to work under limits and focus on profitability at all costs,” Unacademy co-founder and CEO Gaurav Munjal wrote in a letter to employees. Following in the footsteps of Byju, Unacademy – backed by SoftBank and Tiger Global – announced its foray into constructing physical tuition centres across the country last week.
“Winter is here. We must change our ways. We will focus on organic growth channels instead,” the Unacademy CEO wrote.
Investors have been pressuring India’s startup sector to improve bottom lines and focus on core business, and several have recently laid off employees.
Unacademy plans to go public in the next few years and hopes to turn a profit in its primary business of test preparation in the next 12 months, a top company official said on May 20. Gaurav Munjal also stated that the company was trying to expand its Relevel division to worldwide markets, a test platform for private jobs.
“In the next couple of years, we want to do an IPO,” he added on the eve of the company’s first experiential centre, Unacademy Store.
Gaurav Munjal also said the company was looking to make its core business of test prep profitable in the next 12 months.
“In the next 12 months, we are eyeing profitability in our core business, which is the test prep business. We are on track to achieve it. We have started working towards it. In the next 12 months our test prep business will be profitable.
“Relevel is something that we want to build in India and globally. We will continue to invest in the expansion and growth of Relevel. This is the broader strategy,” Munjal said.
The company plans to double down on more distribution channels for the test prep business. He also said the company’s business has grown by about 60 per cent year-to-date.
“We are 60 per cent up without opening these stores. Last year also we grew by 60 per cent. This is just the right time when people are embracing online education. When we will go for an IPO, we will have a multi-product strategy,” Munjal said.
He added that the PrepLadder vertical of the company has been profitable since the last three months.
Valued at $3.44 billion, Unacademy claims to have 7.7 lakh active subscribers.
(With agency inputs)
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