Hobby learning startup laid off about 145 employees—about 30 percent of its workforce—citing tough ‘market conditions’.
The Bengaluru-based company is the latest in a series of startups that have resorted to layoffs since January 2022, owing to a slowdown in funding.
Ishaan Preet Singh, Co-founder of FrontRow, confirmed the developments in an email sent to YourStory.
“Recently, given the market conditions, we’ve prioritised increasing efficiencies across the business both through higher automation and focussing on profitable channels,” he stated.
“To ensure 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,” Ishaan added.
FrontRow Team
FrontRow has reportedly paid its employees their salaries for May, but did not provide any severance, according to Inc42.
Members of the sales, quality control, and HR team were impacted, according to the report.
Ishaan, however, said the layoff primarily impacted the sales team.
Founded in 2020 by Mikhil Raj, Ishaan Preet Singh, and Shubhadit Sharma, FrontRow raised $14 million in a Series A funding round in September last year. It is backed by investors including Elevation Capital, Lightspeed Venture Partners, Eight Roads Ventures, as well as actress Deepika Padukone.
The edtech startup models San Francisco-based upskilling platform MasterClass and works with celebrities, including Neha Kakkar, Amit Trivedi, and comedian Biswa Kalyan Rath, who take sessions. The platform charges Rs 600 or Rs 800 for a class, and also allows for a monthly subscription of Rs 2,000.
Like most edtech startups, FrontRow’s user base expanded exponentially during the pandemic. Earlier, in February 2022, the company said it had 2.5 lakh monthly active users, growing at a rate of 30-40 percent every month.
For FY 2021, the startup had reported a loss of Rs 6.63 crore and a total income of Rs 2.60 crore. Of Rs 9.25 crore in total expenses incurred during the period, Rs 3.21 crore was recorded as employee benefit expenses, according to its filings with the Registrar of Companies.
Now, with high inflation and rising interest rates across the world, along with other macro-economic factors such as the war in Europe, many startups—across India and the world—face the growing challenge of liquidity.
In India, startups including Unacademy, CARS24, Vedantu, BYJU’S, and Mfine have resorted to layoffs. Globally, Bolt and Paypal have also laid off employees. Meanwhile, tech companies including Meta, Uber, Twitter, Microsoft, and Coinbase are enforcing hiring freezes or slowing down hiring.
To deal with the downturn, investors including Sequoia Capital and Softbank have issued a cautious approach this year to deal with the downturn, and prepare for a longer runway. Earlier this month, Y Combinator, a US-based startup incubator, had asked startups to prepare a “plan for the worst”.
