Lightspeed-backed FrontRow, the ed-tech startup, has laid off 75% of its workforce, impacting about 130 employees, leaving the company with a leaner team of about 40 staffers, its founder told FE.
This is the second round of layoffs at Unacademy’s Gaurav Munjal-backed company. In May, the company laid off 150 employees, citing a cash crunch. Since April, the company’s employee strength has come down from around 500 to 40 now. This also comes at a time when the world’s most valuable edtech company, Byju’s said it would sack about 2,500 employees as it eyes profitability by March 2023.
As reported earlier, FrontRow was also in talks to raise a fresh round. It was looking to at a $30-40 million round at a valuation of $200 million, but that deal seems to have fallen through now, resulting in the layoff.
“We’ve laid off employees from the sales and marketing team. Over years, we have realised that building based on heavy marketing is not a sustainable model, we are now realigning to be a product-first company and hence had to lay off around 130 employees. We are now a much leaner team with about 40 people,” Ishaan Preet Singh, co-founder of FrontRow, told FE, adding that he had a runway of over 24 months.
“However, our belief in the market and the need is still extremely strong… we’ll continue to solve for them albeit in a revamped avatar. We remain bullish on the space and what we’re building and have sufficient capital and a great team to continue to solve this problem.”
News website, Entrackr was the first to report this development. Further, funding in edtech startups declined by nearly 45% to $2.2 billion in the nine months to September, data shared by private investment tracker Tracxn showed. In Q1 2022, edtech startups raised $1.4 billion from private equity and venture capital firms but this dropped considerably by 59% to $574 million in Q2 2022. In Q3FY23, the funding crashed 75% to just $142 million Tracxn data showed.
Edtech funding in CY2021 hit a record high of $4.2 billion across 310 rounds. This was higher than the $2.3 billion raised across 220 rounds in CY2019 during the height of the pandemic.
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. It also counts Elevation Capital, Eight Roads Ventures, CRED’s Kunal Shah and Shaadi.com’s Anupam Mittal, among others. The company has so far raised about $18 million in the capital.
Also Read: Byju’s to fire 2,500 staff to achieve profitability by March 2023