Community learning platform FrontRow on Monday laid off 150 employees of its total workforce of 500, citing a funds crunch. The move saw the company’s sales team being hit the hardest. FrontRow is now looking to leverage automation and focus more on its profitable channels, it said in a statement.
The edtech startup becomes the fourth firm in this space to lay off a significant proportion of its employees this calendar year amid a crunch for fresh rounds of funding.
So far, Unacademy has laid off around 1,000 employees, while Lido has shut shop after letting go of around 150 employees. Most recently, Vedantu fired 624 employees, citing a tough macroeconomic backdrop and challenges from offline coaching centres regaining prominence.
At FrontRow, an investor aware of the company’s developments, told FE: “I am not thinking of exiting my investments in the company. I have been through these cycles where there is a slump in funding. Fundamentally, there is nothing to worry about the company — just that overall the markets aren’t very attractive at the moment and FrontRow has had to lay off staff.”
“The company has enough liquidity. However, it is in the process of raising its next round. Hopefully, things should work out. It should be at least a $30-40 million round at a valuation of $200 million,” the investor added.
Last year, the company raised $14 million, post-money, in its Series A round.
FrontRow is a community learning platform where students enrol to learn from celebrities who are experts in their domains. For instance, Suresh Raina teaches batting, applicants can also learn how to sing from Neha Kakkar, among others.
“As we’ve scaled our business over the last year, we had invested heavily in growth, particularly as we’ve been creating a new category. Recently, given the market conditions we’ve prioritised increasing efficiencies across the business both through higher automation and focussing on profitable channels,” FrontRow said in a statement.
“Our mission remains the same — enabling everyone to learn what they love. To ensure that we achieve that goal over the next decades and that we have over 24 months of runway to keep iterating and improving on our core business, we had to take a few difficult prioritisation decisions over the past few weeks. This included letting go of about 30% of our team, primarily in sales, to make sure that we come out of this market stronger,” the statement added.
Ishaan Preet Singh, co-founder of FrontRow, told FE there will be no further layoffs after this.
Asked what the future entails for edtech startups, Pushkar Singh, co-founder at Tremis Capital, said: “We’ll see more edtech companies lay off in masses. That is because these firms hired the most when there was a funding boom in the previous years. Now, most venture capitalists are saying it will be difficult to raise capital and founders realise they will have to survive the next 12-18 months. The only option is to reduce the burn – that’s why we’re seeing mass layoffs, and my sense is we are just starting.”
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