Amid reports swirling about a potential merger or sale involving edtech major , Co-founder and CEO Gaurav Munjal emphasised in a post on X that the company is here for the “long run”.
“There is a lot being said about Unacademy currently. To set the record straight, Unacademy will have its best year in terms of growth and profitability. We also have many years of runway. We are building Unacademy for the long run. Ignore the rumours,” Munjal wrote on X on July 3.
The Unacademy chief’s recent post comes after The Morning Context on Wednesday reported that the edtech company has approached multiple education companies for a possible merger or an outright acquisition. Last month, Entrackr was the first to report that Unacademy is discussing a merger with another Bengaluru-based company K12 Techno, which operates the Orchids International Schools chain.
Munjal, in response to TMC’s queries, noted that the company has engaged in exploratory merger talks with other market players. He added that the edtech sector is undergoing consolidation due to the current intense competition affecting EBITDA, with significant industry consolidation expected within the next year.
Reports about Unacademy come when BYJU’S—once valued at $22 billion—is pursuing new funding at a 99% discounted valuation through a rights issue amid a liquidity crunch.
Prosus, BYJU’S’ largest institutional shareholder, recently wrote off its entire investment in the edtech firm. It had invested $578 million in the edtech company.
Unacademy CEO, however, noted that the company has Rs 1,600 crore in the bank, with a runway of around five years and no debt, as per the TMC report. He added that the edtech firm’s burn is projected to be around Rs 350 crore this year, down from Rs 570 crore the previous year and Rs 1,400 crore the year before.
Back in December 2023, Munjal claimed that the company had reduced its cash burn by 60%, securing a runway of over four years with its cash reserves. Munjal believes that Unacademy has come a long way and has a long way to go.
The Gaurav Munjal-led company—last valued at $3.4 billion—has struggled to secure fresh funds for some time. According to Tracxn, it has raised $880 million in funding to date, with the last round of $440 million occurring in August 2021.
Like many other edtech companies, Unacademy has resorted to measures like layoffs to minimise cash burn amid a funding slowdown.
YourStory on Tuesday reported that the Softbank-backed company carried out another round of job cuts, impacting at least 250 people across multiple verticals. The company laid off 12% of its workforce in March last year. Before that, it laid off 10% of its workforce in November 2022.
The Bengaluru-based firm’s employee count is said to be hovering around 2,000. It has undergone several top-level changes, including departures, appointments, and promotions.
Most recently, Unacademy’s Co-founder Hemesh Singh stepped down as Chief Technology Officer to transition to an advisory role, while the company plans to appoint Sumit Jain, a partner at the firm, to its board of directors to fill the seat vacated by Singh.
Unacademy’s leadership, including founders, were expected to take salary cuts in FY24 to work towards profitability. The company hasn’t reported its FY24 financials yet.
The edtech company reported a loss of Rs 1,678.1 crore in FY23 down from Rs 2,847.9 crore in FY22. Meanwhile, its operating revenue surged to Rs 907 crore compared to Rs 719.2 crore in the previous fiscal year.
Edited by Suman Singh
