Edtech start-up Udayy, which offered an online learning platform for grades 1 to 8, has shut shop and laid off all its 100 employees as the firm was unable to manage sustainable growth in a hyper-competitive edtech segment.
Udayy’s co-founder and CEO Saumya Yadav confirmed the development to FE. Till date, the start-up has raised over $10 million in funding, including from prominent investors such as AlphaWave, InfoEdge and Better Capital.
Udayy becomes the sixth firm in the edtech space to lay off a significant proportion of its employees this calendar year amid a crunch for fresh rounds of funding.
“It was a very difficult decision but we did it in the best way possible so everyone finds a good place. We started during the pandemic and were doing very well during the pandemic. But, after the pandemic when offline schools opened up, growth stalled and it became very expensive to get new customers and service the old ones,” Yadav told FE.
Founded in 2019 by Karan Varshney, Mahak Garg, and Yadav, the edtech platform offered maths and English training to children in the age group of 6-11 years using an interactive online classroom of 3-5 children in each batch. It also launched a free app providing daily worksheets for students.
According to the company’s website which is now defunct, it has conducted more than 130,000 classes with over 200 qualified teachers and 50,000 kids are using its services as of 2022.
Yadav told FE that after the company shut down operations in April, it went on to provide outplacement services to all the affected employees. Udayy also offered a severance package to employees, and a health insurance package, according to Yadav.
“We reached out to about 30 companies and were successful in securing a job for all our employees…We have refunded all our customers their money. We had raised around $13 million and had used up around $4-$4.5 million, and the remaining around $8-$8.5 million will be returned to the investors. The legal process is going on and it should take around two months to complete,” she added.
So far in edtech, 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.
On Monday, community learning platform FrontRow also laid off 150 employees of its total workforce of 500, citing a cash crunch. Apart from this, the much-hyped metaverse-based edtech start-up, Metaversity, founded by former Twitter India chief Manish Maheshwari laid off another 20 employees last week as the company failed to take off.
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