Udayy, an edtech firm, has laid off 100-120 staff and closed its doors when sales decreased following the reopening of schools.
According to Yadav, all employees, including instructors, have received severance pay, and practically everyone has been relocated.
“We had enough capital in our books, but the business no longer made sense in the offline world, customer acquisition cost became very expensive,” cofounder Saumya Yadav told as per reports. “We had enough capital, but a post-pandemic lot of parents started asking for refunds, and kids did not have time as schools opened up.”
The Gurugram-based firm, founded in 2019 by Karan Varshney, Mahak Garg, and Yadav, provides learning and education services to kids in kindergarten through eighth grade, with roughly 5,000 students served each month.
The firm had hoped to find consumers for its main offering, English language classes, but that did not happen.
“We used very little capital, as we were very cautious of burn…we did evaluate looking for buyers, but K-12 has been very difficult right now and no deals materialised,” said Yadav.
In February, Udayy received a $10 million investment from Norwest Venture Partners in the United States. A year ago, it received $2.5 million in startup capital. “We returned around $8-$8.5 million to the investors,” Yadav said.
Many IT firms have closed or altered their businesses.
Lido Learning, an ed-tech firm, announced its closure in February, citing identical reasons. FrontRow, an ed-tech platform, announced layoffs last week as the firm restructured to improve efficiencies and extend its runway.
After years of rapid expansion, edtech companies are bracing for a downturn in the financing, and some, such as Unacademy and Vedantu, have slashed staff to save money.
