No free meals, salary cut for senior staffers!

Facing fund crunch

- To shut down some businesses

- Unicorn has $352 mn in bank

- Digital learning takes a big hit

- Startups tightening their belts

Bengaluru: After laying off staffers in recent months, edtech unicorn Unacademy has embarked upon a slew of cost optimisation measures to conserve cash and become profitable in the near-term.

In an internal note, Unacademy co-founder and Chief Executive Gaurav Munjal wrote to employees that founders and management would take a pay cut along with closing down certain businesses as part of cost optimisation move.

The company, which has plans to go public in next two years, have also decided to put curbs on unnecessary travel along with stopping of meals and snacks in offices.

Unacademy co-founder and Chief Executive Gaurav Munjal wrote that though the startup had $352.33 million in the bank, but he felt that the startup was in a "bad state," and "not efficient" with handling finances.

"We are not efficient at all. We spend crores on travel for employees and educators. Sometimes it's needed, sometimes it's not. There are a lot of unnecessary expenses that we do. We must cut all these expenses. We have a strong core business. We must turn profitable asap," he said.

The measures include Unacademy's founders and management to take pay cut. As founders have already taken a pay cut, it will now be implemented for the management. Similarly, strong guidelines will now be followed for allowing travel, especially business class travel. Also, the CXO level executives will not now provided with dedicated drivers as part these cost optimisation moves. Moreover, meals and snacks will not be available across offices for the employees.

"Until now we have never had frugality as one of our core values. Honestly, since we were focused on growth and the fact that we had raised millions of dollars of capital it (frugality) wasn't a priority," Munjal said in the internal note. "But now the goal has changed. We have to do an IPO (initial public offering) in the next two years. And we have to turn cashflow positive. For that we must embrace frugality as a core value," Munjal added. The company will also be shutting down certain businesses that have failed to find PMF (product market fit) like Global Test Prep, according to the product note.

Startups in India are tightening their belt as a funding winter is anticipated over the next two years owing to economic slowdown. Edtech firms including Byju's, Unacademy, Vedantu, FrontRow among others have laid off hundreds of staffers in the last three months as digital learning takes a hit with reopening of schools.

We are not efficient at all. We spend crores on travel for employees and educators. Sometimes it's needed, sometimes it's not. There are a lot of unnecessary expenses that we do. We must cut all these expenses

- Gaurav Munjal, Unacademy co-founder