Unacademy prepares to fund winter, cut marketing budget and cut educator incentives
As tech stocks tumble globally and investors turn conservative, edtech unicorn Unacademy is putting more emphasis on profitability by drastically cutting the marketing budget and slashing some educator incentives, among other measures.
In an internal memo to employees, CEO Gaurav Munjal said, “Tech stocks around the world are crashing and burning due to tighter monetary policies and rising interest rates. We envision a period where funding will dry up for at least 12 to 18 months. Some people predict it could last 24 months. You have to adapt. »
Focus on organic growth
He added that the focus now is profitability and free cash flow generation. To achieve this, the company will focus on organic growth channels. All incentives for educators that are not income-related will be removed completely, the team has been asked to travel only when absolutely necessary, and meetings that can take place online must use the option. .
The company is also working to monetize each test prep category over the next three months and aims to monetize Uncademy Centers (offline centers) in FY23. Additionally, its subsidiaries like Relevel and Graphy have been asked to drastically reduce their burn rate.
“We thrived in an environment where resources and capital were abundant. There were times in 2018-19 when we struggled to raise funds, but the business felt no impact as, as always, we had 30 months of track. And then after 18 rejections, we lifted our Series D round. But now we have to change our ways. Winter is here,” adds Munjal.
With the funding environment deteriorating, even well-funded start-ups have started to cut their teams. Last month, Unacademy laid off about 600 employees and contractors from its core test prep business, citing role redundancy and performance. All terminated employees would have received severance payments in accordance with their contracts. Unacademy has more than 6,000 employees across the group, making these layoffs around 10% of its workforce.
Published on
May 26, 2022
