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Unacademy goes for cuts in brand marketing budget

Co-founder and CEO Gaurav Munjal has said the ed-tech company will now focus on organic growth channels

e4m by exchange4media Staff
Published: May 27, 2022 10:07 AM  | 3 min read
Unacademy

Ed-tech platform Unacademy has significantly reduced its brand marketing budget as part of its cost-cutting exercise to conserve cash in the wake of investment rollback by private equity (PE) and venture capital (VC) firms.

In an internal letter to employees, Unacademy Co-founder and CEO Gaurav Munjal has said the employees must learn to work under constraints and focus on achieving profitability. He also suggested that the funding winter is here and fresh funding will be hard to come by for at least 12-18 months.

"Tech stocks globally are crashing and burning due to tighter monetary policies and rising interest rates. We are looking at a time where funding will dry up for at least 12-18 months. Some people are predicting that this might last 24 months," he stated in the communication.

Munjal has listed down key steps being taken by the company to achieve profitability. Apart from a reduction in brand marketing spends, Unacademy will focus on organic growth channels.

He also stated that every test-prep category that Unacademy runs must become profitable in the next three months. Unacademy Centres, he added, should be profitable in FY'23 with businesses like Relevel and Graphy, which are in blitz-scaling mode must become extremely mindful about Burn and reduce it significantly.

All incentives for educators that are not linked to revenue have been completely removed or are in the process of getting completely removed, he revealed. Munjal also urged the employees to travel only if it is absolutely needed. Meetings that save Travel costs and that can happen on Zoom should happen on Zoom, he noted.

Munjal said Unacademy was never resource-constrained as it always raised more money than what was needed. This, he said, allowed it to continuously experiment and grow the Platform without worrying about a funding crunch.

"It also allowed us to build the right Product and monetise the right way. We said no to selling Courses on a Pen Drive or building a Field Sales team because we wanted to be a Product company. And scale like one. We wouldn't have been able to do this if we didn't have the right Funds," he stated.

He also highlighted the fact that monetisation through the Subscription Product allowed the platform to experience true Product Led Growth. "We flourished in an environment where Resources and Capital were abundant. There were times in 2018-19 when we were finding it difficult to raise money but the company wasn't impacted because as always we had 30 months of runway. And then after 18 rejections, we raised our Series D Round."

According to media reports, the company has laid off around 1,000 employees, including on-roll and contractual staff.

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