In the first two weeks of March 2021, some 100-odd sales executives at seven-year-old edtech company Vedantu found themselves locked out of their email accounts. Their credentials were rescinded and the teams working under them were either disbanded or re-assigned. The executives were fired without any notice period, on charges of making “unethical or fraudulent” sales.
The Ken spoke to over 20 such executives over a joint Google Meet call. “They turned us into scapegoats. But they haven’t been able to prove any wrongdoing. So how can they fire us?” says one angry Bhopal-based business development executive (BDE). Between January and March, 500 such executives were let go—a fourth of Vedantu’s total sales force. The company currently employs about 6,000 people.
Vamsi Krishna, the co-founder and CEO of Vedantu, seems unflappable when asked about the allegations. He calls it a “routine” churning out of under-performers. “We lose 8-12% of the workforce every month. That’s better than the 20% churn rate in the industry,” he tells The Ken.
The number of fraudulent cases reported and acted on is higher in this cycle, he admits. “We constituted a new system to track any fraudulent activity in 2020. We have zero-tolerance towards unethical sales practices.” Fraudulent here refers to a range of cases, claims Krishna, with the most common form being when an executive logs a fake sale into the system.
The public backlash is a blemish on what was otherwise a stellar growth period for Vedantu during the Covid-19 pandemic, as schools were forced to shut and education moved online. The company raised $100 million in a Series D round in July 2020, with its valuation more than doubling from $275 million to ~$600 million between February and July.
According to the company, both revenue and number of users grew 6X over the last year—it added two million new students, 250,000 of whom are now paying customers. To top it all, online live classes, a concept that Vedantu pioneered, went mainstream because of the pandemic.
The pandemic year gave Vedantu an unexpected push into the big league, alongside Byju’s and Unacademy, both of which directly compete with Vedantu’s K-12 and IIT-JEE IIT-JEE Joint Entrance Exam Joint Entrance Examination – Advanced (JEE-Advanced), formerly the Indian Institutes of Technology-Joint Entrance Examination (IIT-JEE), is an academic examination held annually in India. It is the sole prerequisite for admission to the Indian Institutes of Technology test-prep products. But it also led to quick consolidation in the sector, with Byju’s reportedly swooping up Aakash and Toppr swooping up Aakash and Toppr Byju's big acquisitions Byju's has made a bid to buy out two of its biggest offline and online rivals in the K-12 and test prep space.