Unacademy, one of the high-profile Indian startups, has urged its employees to learn how to work under pressure and focus on achieving profitability as the online learning platform backed by SoftBank and Tiger Global has entered a dry funding period. the industry predicts as long as 18 months.
The online learning platform, which has raised more than $800 million and was last valued at $3.44 billion in its most recent funding round in August, “always raised more money than was needed” to “constantly experiment and improve our platform.” grow without worrying about when we will run out of money,” co-founder and chief executive Gaurav Munjal wrote in an email to staff on Wednesday.
†[…] But now we have to change our ways,” he wrote in the email, the content of which was obtained and reviewed by gotechbusiness.com.
“Winter is here.”
Munjal said he expects funding shortages for 12 to 18 months. “Some people predict this could take up to 24 months. We have to adapt. This is a test for all of us. We must learn to work under duress. We need to focus on profitability at all costs,” he wrote in the email captioned “Another iconic target this time.”
“We have to survive the winter,” he added.
Investors around the world have sounded the alarm in recent weeks, urging portfolio founders to plan for the “worst” amid a sharp reversal in technology stocks after a 13-year bull run. Y Combinator last week advised its startups to raise additional capital if they can to ensure they have a runway of about two years, gotechbusiness.com first reported. Sequoia and Lightspeed have made similar suggestions.
Numerous startups, many of which raised capital during the 2021 peak valuations, are currently struggling to attract new rounds as investors become increasingly cautious and the good old comprehensive due diligence makes a comeback. Several VCs that a few weeks ago were at an advanced stage of talks to support startups – at various stages – are renegotiating prices.
Edtech startups across India – and many other markets – are grappling with additional challenges as schools and other institutions reopen, undoing some of the rapid and widespread adoption of online platforms seen during the pandemic.
Unacademy, Vedantu and Lido, three startups operating in space in India, have each shrunk their workforces in recent months to eliminate layoffs and improve their financial performance. Byju’s, India’s largest edtech, already tried to go public via the SPAC route last month, aiming for a valuation of more than $40 billion, but has since postponed plans after the market collapse, according to a source known. is with the case.
Munjal emphasized in the email that Unacademy’s new goal is to achieve profitability and generate free cash flow. In recent months, Unacademy has taken steps — such as closing its K-12 supply and phasing out some inorganic areas it had expanded into post-acquisitions — to cut costs and mitigate risk.
He outlined several other steps the company is taking:
We have significantly reduced our Brand Marketing Budget
We will instead focus on organic growth channels
Every test prep category we run should become profitable in the next 3 months
Unacademy Centers Must Be Profitable in FY’23
Companies like Relevel and Graphy that are in Blitzscaling mode should be very aware of Burn and significantly reduce it
All educator incentives not linked to earnings have been or are currently being removed completely
Travel only when absolutely necessary. Meetings that save travel costs and can happen on Zoom should happen on Zoom
“We can only achieve this iconic goal if we all work towards it,” he added.
