Unacademy to shut global test prep biz
As start-ups across industries face a protracted fundraising winter, edtech unicorn Unacademy is implementing a number of cost-cutting initiatives.
Unacademy Co-Founder and CEO Gaurav Munjal wrote to his staff in an email that the company must “embrace frugality as a core value” in order to become cash-flow positive and pursue its intended initial public offering (IPO) in two years.
“We are not at all efficient, despite having more than Rs 2,800 crore in the bank (as of this morning). We spend millions of dollars on employee and instructor travel. It’s necessary at times but not always. We spend a lot of money that is not essential. All of these costs need to be reduced. Our primary business is robust. He stated in his email, a copy of which Business Today has examined, “We must become profitable as soon as possible.
The company will discontinue its business verticals, such as global test preparation, and its founders and senior executives will receive salary reductions.
Munjal also outlined a number of further adjustments related to the concept of frugality, such as reducing complimentary meals and snacks, eliminating dedicated drivers for CXOs and founders, and establishing a strict travel policy that forbade business class travel for all staff.
“Now, all of these changes could give the impression that our situation is dire. Believe me. Not at all. We are in fantastic shape. This is the last obstacle we need to overcome. Profitability. and when we do, the game will alter for us,” he stated.
The changes follow the company’s early-year dismissal of almost 1000 employees. Later, in May, Munjal had informed his staff that the company would need to change its course due to a financing winter. In his email at the time, Munjal stated, “We must learn to work within constraints and focus on profitability at all costs.