- Edtech giant
Unacademywould discontinue its global test prep activities.
- The founders and top management of Unacademy will implement pay cuts to accelerate the road to profitability.
- The company plans to do so as it plans to go public in the next two years.
Edtech giant Unacademy would shut down its global test prep business because of its inability to fund proper product-market adaptation, the company’s founder and CEO
Munjal stressed in an internal note to employees that the founders and top management of Unacademy will implement pay cuts to accelerate the road to profitability and reduce cash burn. The company plans to do so as it plans to go for an initial public offering (IPO) within the next two years.
Must become profitable as soon as possible
“We have to do an IPO in the next two years. And we need (to) make the cash flow positive. For that, we need to embrace frugality as a core value,” Munjal added in his last note, as per a
report through Economic Times.
“Even though we have over ₹2,800 crore in the bank (as of this morning), we are not efficient at all. We spend millions on employee and educator travel. Sometimes it is necessary, sometimes not. There are many unnecessary expenses that we make. We have to cut back on all these expenses. We have a strong core business. We need to become profitable as soon as possible,” Munjal said.
Gaurav Munjal had written a similar note to Unacademy staff in May, raising the alarm about a funding winter that could last another 12-24 months. He asked the employees to focus on organic growth channels, work under constraints and focus on profitability at all costs.
He noted that the company must survive the winter and maintain profitability and free cash flow as the next goal. He had also asked them to ensure that the company is profitable in every test prep category in the three months.
Founded in 2015 by Roman Saini, Hemesh Singh and Gaurav Munjal, Unacademy is a test preparation startup. The company launched offline Unacademy Centers this month to offer NEET UG, IIT JEE and foundation courses to students from the IX to XII.
It also plans to open its first Unacademy center next month in Kota, Rajasthan, the country’s center for coaching classes. In May, Munjal asked employees to ensure the Unacademy Centers would become profitable in FY23.