12 Jul , 2022 By : Monika Singh
Unacademy has chalked out several cost-cutting measures, including pay cuts for the founders and shutting down “certain businesses”, to inch closer to its profitability and initial public offering (IPO) goals.
The edtech startup plans to go public in two years, and for that frugality — which hadn’t been a core value till now — will be at the forefront, according to an email sent by CEO and co-founder Gaurav Munjal to employees.
He said Unacademy will shut down certain businesses that haven’t found their product market fit, for instance, the global test preparation category.
Unacademy has acquired at least four companies in the test prep space – Handa ka Funda, NeoStencil, Swiflearn and PrepLadder.
Munjal further said the management personnel will be taking pay cuts and the founders have already done so. Besides, the company’s C-suite employees will no longer have dedicated drivers for themselves and while travelling by air, an upgrade to business class travel would have to be paid out from personal pockets.
“We have to do an IPO in the next two years. And we have to turn cash flow positive. For that, we must embrace frugality as a core value,” Munjal said in his email.
These developments come despite the SoftBank-backed edtech startup recently claiming it has Rs 2,800 crore in the bank. Chief operating officer (COO) Vivek Sinha had told FE that Unacademy had a runway of 48 months as of June 9.
Unacademy has already laid off at least 750 employees so far this year, citing cost crunch. Some fear that if more categories are shut, more employees may be sacked.
In the same email, Munjal re-emphasised the need for positive cash flow. “Now, all of these changes might make it seem that we are in a bad state. Trust me. We are not. We are in a great state. This is the final frontier that we have to conquer. Profitability. And once we do, It will change the game for us,” Munjal’s mail stated.
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