Unacademy to shut global test prep biz, top management to take pay cuts

Edtech unicorn Unacademy is undertaking several measures of cost-cutting as start-ups across industries are staring at a prolonged funding winter. 

In an email sent out to his employees, Unacademy Co-founder and CEO Gaurav Munjal said the company must ‘embrace frugality as a core value’ to become cash-flow positive and to pursue its planned initial public offering (IPO) in two years. 

“Even though we have more than Rs 2,800 crore in the bank (as of this morning), we are not efficient at all. We spend crores on travel for employees and educators. Sometimes it’s needed, sometimes it’s not. There are a lot of unnecessary expenses that we do. We must cut all these expenses. We have a strong core business. We must turn profitable asap," he wrote in his email, a copy of which has been reviewed by Business Today. 

Unacademy founders and senior management will take a pay cut and the company will shut down its business verticals, such as global test prep, that have not found product market fit. 

Munjal also listed out a number of other changes towards the theme of frugality including cutting down on complimentary meals and snacks, withdrawing dedicated drivers for CXOs and founders, and putting in place a strong travel guideline including cancelling of business class travel for all employees. 

“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,” he wrote. 

The developments come after the company sacking nearly 1000 employees early this year. Later, In May, Munjal had warned his employees of a funding winter that would necessitate a course correction for the company. "We must learn to work under limits and focus on profitability at all costs," Munjal wrote in his email at the time. 

In August last year, Unacademy raised $440 million (about Rs 3,270.8 crore) in funding from a clutch of investors including Temasek, General Atlantic, and Softbank Vision Fund, valuing the ed-tech major at $3.44 billion.