All is not well within India's nascent ed-tech sector, with the latest being unicorn startup Unacademy laying off 250 employees across departments in the latest round of job cuts. Stating in this regard, the Bengaluru-based startup said the restructuring has happened because of its efforts towards "efficiency".
"As part of our ongoing efforts to streamline operations and enhance business efficiency, we have recently undergone a restructuring exercise," the Gaurav Munjal-led company, last valued at 3.4 billion, states.
Unacademy says it's focussing on "profitability" and "sustainable growth", thus prompting the layoffs. "This was necessary keeping in mind the company's goals and vision for the year, as we focus all our efforts on sustainable growth and profitability. Consequently, some roles have been impacted. While this transition won’t be easy, we will be supporting all impacted individuals during this transition."
Weeks before, Unacademy co-founder and chief technology officer, Hemesh Singh had also exited the company.
While the ed-tech company goes through the transition, some reports also claim the company may be looking for possible merger options, though Munjal has denied such reports. Some also claim the company is having merger talks with K12 Techno, which operates Orchids International Schools chains, though Unacademy has not officially said anything about this. Munjal, meanwhile, says “rumours should be ignored” as his team is building the company for the long run.
"There is a lot being said about Unacademy currently. To set the record straight, Unacademy will have its best year in terms of growth and profitability. We also have many years of runway. We are building Unacademy for the long run. Ignore the rumours," he says via X today. Along with his post, the founder shared a photo of noted American writer Mark Twain, with a quote that reads: "Reports of my death have been greatly exaggerated."
Like its peers, Unacademy has also seen a lot of restructuring in the recent past. In its previous round of layoffs, Unacademy had fired around 10% of its employees in March 2024 and over 100 across group company PrepLadder. The impact of the funding winter, seen across the startup industry, is clear; its last funding round ($440 million) was in 2021.
Consumer internet and technology investor Prosus has written off its 9.6% stake in edtech platform Byju's citing a decrease in value for equity investors. The company reported a value loss of $ 493 million in the reporting year that ended on March 31, 2024.
Just last month, technology investor Prosus wrote off its 9.6% stake in edtech platform BYJU's, citing a decrease in value for investors, thus reporting a value loss of $493 million in FY24.
However, the year 2024 may not be too bad for the startup industry. The tech startups alone raised $4.1 billion in the first half of 2024 (H1), a 4% increase from $3.96 billion in H2 2023, the latest data by market intelligence firm Tracxn shows.
Tracxn says though there was a 13% decrease compared to the $4.8 billion raised in H1 2023, India remains the “fourth-highest funded country globally” in the tech startup landscape. The funding challenges are still persistent in the country, but the first half of 2024 saw 8 funding rounds.
The first half of the fiscal year also created three unicorns, a rise from none in H1 2023, alongside 33 new additions to the Soonicorn club. The number of IPOs also rose to 17 in H1 2024, from 6 in H1 2023 and 12 in H2 2023.
