SoftBank-funded Unacademy told employees that they would not be getting cash appraisals this year as the edtech startup reins in cash burn. The company would instead be rewarding staffers with stock options based on their performance.The belt-tightening measures come at a time when Unacademy has been eyeing profitability and an eventual public market listing. CEO Gaurav Munjal said the startup’s growth in 2023 was looking better than it did in 2022 and that Unacademy was faring better than its competitors.
“Our burn is significantly down. But we must continue to focus on profitability, because when Unacademy does an IPO, it should do it with at least four quarters of profitability. To achieve the same, we have decided to not do any cash appraisals this year. Instead we will reward stock options to everyone based on their performance,” Munjal said in an email to employees. FE has reviewed a copy of the same.
The prudent moves come despite Unacademy saying it has around Rs 2,800 crore in its bank account. The company had also reduced its cash burn to Rs 50-60 crore a month, sharply lower from Rs 200 crore that it was losing every month earlier, according to reports. Unacademy has fired more than 1,000 employees since the beginning of 2022, dropped its Indian Premier League (IPL) sponsorship deal and discontinued free snacks for all — which were costing the company Rs 40-50 lakh per month — among several other measures.
In July last year, the founders and management also took pay cuts, the c-suite employees lost access to dedicated drivers and upgrades to business class on flights were to be paid out from personal pockets. “I know this is disheartening to hear after putting in a lot of hard work but I want you all to understand that this is a phase. Our revenues grew in 2022 even though almost every other competitor’s revenue fell…it’s a matter of time before we are the number one company in edtech. I believe that we will have a lot of wins in 2023,” the CEO’s mail further said. Unacademy did not respond to queries till the time of going to the press.