Like many companies across the world, Indian edtech giant Unacademy hasn’t been spared by the global economic downturn or the so-called stagflation in the first half of this year.
Just last week, the $3.4-billion-valued company laid off laid off Inc42 Exclusive: Edtech Unicorn Unacademy Lays Off Another 150 Employees Read more over 150 employees, mostly from its sales and operations teams, according to Inc42. More alarmingly, this round of layoffs came just two months after Unacademy let go of 10% of its workforce—around 600 full-time and contractual employees.
During this whole turmoil, though, Unacademy has been pitching a new software-as-a-service (SaaS) product to companies such as fintech Slice, short-video and live-commerce app Trell, and fellow edtech Scaler. In fact, The Ken has learned that Unacademy even pitched this service, called Cohesive, to its main rival and the biggest edtech in the world—the $22 billion-worth BYJU’s BYJU’s The Ken An audit reckoning—the $22B Byju’s juggernaut is yet to get Deloitte’s approval Read more .
Cohesive is a tool that helps companies create context-specific development environments. According to a company blog post, a development environment is a temporary location where software applications are tested and reviewed prior to release. Cohesive is ideally suited for companies that face unique spikes in usage during a particular time. For example, lunch hour at a foodtech company or the final five overs of a cricket match on a streaming platform.
Cohesive was set up in November 2021, led by Unacademy’s former head of data science, Vaibhav Sinha. The team currently has seven employees, as per LinkedIn, most of whom have worked at Unacademy. While pitching to companies, though, the Cohesive team stresses that it’s a separate entity, The Ken has learned. However, Cohesive is housed under Unacademy’s parent company, Sorting Hat Technologies Pvt Ltd.
Venturing into SaaS is an interesting, although not surprising, experiment for Unacademy. Despite a boost during the pandemic, profits remain elusive for edtechs. According to company database Tracxn, none of the large Indian edtechs are profitable. Unacademy recorded revenues of Rs 465 crore ($59 million) in the year ended March 2021, which included losses of Rs 1,537 crore ($197 million).
And with the recent downturn, funding has also dried up across the board. With almost half of 2022 already over, Indian edtech companies have only managed to raise $1.61 billion so far. Unacademy’s last funding round was in August 2021, when it raised $440 million, led by Singapore’s sovereign wealth fund Temasek.