Amid the ongoing funding slowdown in the Indian start-up ecosystem, edtech unicorn Unacademy has reduced its monthly cash burn to Rs. 1.9 crore, with its revenue reaching Rs. 130 crore, its founder and CEO Gaurav Munjal said in a tweet on Wednesday.
Responding to a Twitter user who shared a meme about how edtech firms, including the likes of Byju’s and Unacademy, burn cash, Gaurav Munjal, Unacademy’s founder and CEO, said that this “used to be the case a few months ago”.
“Our FY24 numbers are going to be awesome. This year is going to be the best year for Unacademy so far,” the CEO added.
This comes after Munjal in November last year said the company’s cash burn came down to $7 million (around Rs. 57.4 crore), from $20 million (around Rs. 164 crore).
“Offline has contributed but online business is also doing well. Some de-growth but unit economics have improved a lot,” Munjal said in a separate tweet.
In recent months, the edtech major – last valued at $3.4 billion – has been undergoing retrenchments as it looks to turn profitable. The SoftBank-backed firm had, in March this year, laid off 12 per cent of its workforce or 380 employees in a bid to “meet the goals in current realities”.
This was Unacademy’s fourth round of job cuts in the past year, with its workforce being trimmed to under 3,000 from a prior 6,000 in early 2022.
The Bengaluru-based firm had given pink slips to 350 employees or 10 per cent of its workforce of 3,500 employees in November 2022. In April last year, the firm had sacked another 1,000 employees.
The edtech learning platform had reported a net loss of Rs. 2,693 crore for 2021-22, according to data accessed by the business intelligence platform, Tofler. This was an 83 per cent increase from the previous financial year.
The company’s total expenses for the year were reported at Rs. 3,411 crore. The firm reported its revenues for 2021-22 at Rs. 718 crore, a 78 per cent jump since the last financial year.
Among the many edtech firms that found success during the COVID-19-induced lockdown when students were unable to go to school, Unacademy, too, once perked up investor interest. The firm has raised a total funding of $877 million.
In August 2021, the firm raised $440 million in a funding round led by Temasek, with General Atlantic, Tiger Global and Softbank Vision Fund pitching in as other participants.
The fundraising took the Unacademy Group’s valuation to $3.44 billion -- up from a $2-billion valuation in November 2020. The group’s valuation grew almost 10 times in 18 months, which, analysts say, is one of the fastest growth rates by a mid-stage consumer internet start-up in India.
Battered by layoffs and the funding slowdown – which dealt a massive blow to the edtech sector, the firm has since been on a path of rationalization in a bid to achieve profitability.
According to industry estimates, of the more than 22,000 layoffs that took place in 2022, over 8,000 came from the edtech space. Since inception, the edtech sector has cumulatively laid off more than 12,000 people, as per data from Layoffs.fyi, a tracking platform for layoffs.
The new year has not been kind to edtech companies either. Since the start of 2023, edtech start-ups have laid off around 3,500 employees amid a funding crunch that has hit early-stage firms and unicorns – companies valued over $1 billion – alike.