Edtech unicorn Vedantu has laid off 424 employees, about 7 per cent of its workforce, according to a blog post shared by the Bengaluru-based firm. This comes as the focus in the edtech space has shifted to profitability, according to experts. The lay-off comes days after the company fired 200 contractual and full-time employees, at a time when offline schools and colleges are opening up and learning is evolving into a more nuanced blended delivery model with a mix of online and offline.
Edtech unicorn Vedantu has laid off 385 employees, nearly 11.6 per cent of the company workforce, according to sources. This move is being seen as part of a drive in the edtech sector towards profitability via cost-savings and consolidation, as funds dry up, they said. The Bengaluru-based firm has laid off over 1,100 employees (both full-time and contractual), so far, this year.
After a prolonged winter, the Indian edtech sector seems to be witnessing some signs of a thaw. The sector has received $608.8 million of funding across 68 deals in 2024 so far - 153 per cent more than the $240.9 million across 106 deals during the same period last year - according to data from market intelligence platform Tracxn.
'Many were caught in a burnout race, chasing unsustainable growth without innovating.'
Falling valuations, slowing funding rounds and faltering investor sentiment seem to have prompted many start-ups to lay off employees in a bid to conserve cash. The latest to do so is SoftBank-backed Cars24, a leading e-commerce platform for pre-owned vehicles, which has laid off over 600 staff, according to sources in the know. The move, they said, is aimed at conserving cash amid cautious investor sentiment and a slowdown in funding.
With investors asking for a change in the board structure at Byju's, the edtech giant's founder and chief executive officer (CEO), Byju Raveendran, is now asking them to put $300 million into the company for more control. The company has rung up $5.8 billion from investors such as General Atlantic, Sofina, the Qatar Investment Authority, Sumeru Ventures, Vitruvian Partners, BlackRock, Chan Zuckerberg Initiative, Sequoia, Silver Lake, Bond Capital, Tencent, and Tiger Global.
'Considering Pai is putting his own personal money in Byju's, stakeholders in the company can look forward to more governance and transparency.'
Venture Intelligence data shows that during January to July 2020, investors infused $998 million in 31 deals. The total number of deals reported in 2019 was 42 worth $404 million.
'India's edtech and start-up story will be in danger.'
'Byju's financials only reflect the core business. At a group level, they are experiencing substantial losses.'
In continuation of the recent trend, another edtech major has issued pink slips to hundreds of employees. Bengaluru-based Byju's - valued at $22 billion - has laid off about 500 employees at its group companies -WhiteHat Jr and Toppr. It's a move to drive cost efficiency, according to the company. The number of layoffs, cutting across various department functions, may increase, sources said.
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'Which fund manager in the world will put money into a company that hasn't filed its annual account?'
The reopening of schools and colleges has sparked a crisis in the edtech sector with falling valuations, slowing funding rounds and faltering investor sentiment. In a totally altered, post-pandemic landscape where students are back at school and colleges, companies are scrambling to revert to bricks-and-mortar tuition centres and adopting a hybrid model of offline and online education. Demand for online tuition has fallen, affecting the revenue of edtech companies in recent months. After two years of booming revenues, some experts say the sector is looking at a possible meltdown.
On a cloudy Monday this month, Mohammed Irshad flew from Kochi to Gurugram to attend an exclusive investor networking event. Among a handful of founders selected for the event, Irshad was to pitch his peer-to-peer learning start-up Notespaedia for funding in front of top venture capital investors such as AngelBay, Elevation Capital, and Inflection Point Ventures. He failed to woo them, but the feisty entrepreneur was determined to continue his hunt.
Students may choose between weekday and weekend batches, and attend scheduled online maths and science classes based on their school curriculum.
Amazon India has decided to shut down 'Amazon Distribution', according to sources. This follows its recent decision to shut its food delivery and edtech offerings. The moves are part of the annual operating planning review process amid global macroeconomic uncertainty. The e-commerce giant is looking to focus on its core businesses, sources said.
Udaan - India's largest business-to-business (B2B) e-commerce company - has laid off about 180 employees, or 4-5 per cent of its workforce of 4,000, in a move to drive cost efficiency, revealed sources. They said the layoffs have happened across various department functions. The layoffs have happened at a time when the Bengaluru-based firm is trying to turn into a publicly listed entity in 18-24 months.
Live lessons help students strengthen their JEE preparation. They can also track their progress over time, identify strong and weak areas, get insights on overall test-taking strategy.
Fresher hiring is expected to more than double compared to last year.
Parents should enroll their children in coding classes only as a leisure time activity, that too with strict curbs on screen time.
The mind block against online education is crumbling and the demand may be led not just by parents but also teachers.
Unacademy may see a funding dry spell for at least next 12-18 months and even last till 24 months and will cut costs to weather the lean period, said the chief executive of the education technology unicorn that recently laid off more than 600 employees. "This is a test for all of us. We must learn to work under constraints and focus on profitability at all costs. We must survive the winter," said Unacademy's co-founder and CEO Gaurav Munjal in a letter to the employees. "Winter is here. We are looking at a time when the funding will dry up for at least 12-18 months.
Remember, the security of your job primarily depends on two major factors -- how relevant you are for the organisation and how the organisation is aligned to its stakeholders (investors, clients and employees)
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The stock-and-cash deal is the biggest in the education space.
The pandemic has confined students across all ages to home and digital education is the only way to continue learning.
Byju's, says Anita Kishore, has given the founders of the businesses it has acquired the independence to operate separately and maintain their core culture.
Will Covid-19 permanently change higher education, asks Ajit Balakrishnan.
With the lockdown in force, live online teaching has become the order of the day, report Peerzada Abrar and Sai Ishwar.
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