Employees of the edtech unicorn Unacademy will not receive appraisals in 2024, according to co-founder and CEO Gaurav Munjal during a virtual town hall. In 2023, instead of cash appraisals, the company provided performance-linked stock options to its employees.
“2023 was an average year for us, and while 2024 was better, it was still not great. We didn’t hit our growth targets. The positive side is that our burn rate is very low now, giving us a substantial runway, and we are not facing a survival risk,” said Munjal during the town hall.
Munjal explained that the company couldn’t proceed with appraisals this year due to missing the projected growth numbers. “I know I mentioned that we would do appraisals a few weeks ago, but during the process, we realized it was a mistake,” he added.
He encouraged the workforce to see the broader picture. “We are still standing strong while our competitors are falling one by one,” Munjal said.
This announcement follows the recent layoff of 250 employees as part of efforts to streamline operations and enhance efficiency. Last month, reports indicated that the SoftBank-backed firm was in early talks to merge with K12 Techno, which operates Orchids International Schools.
Unacademy raised its last equity round of $440 million at a valuation of $3.44 billion in August 2021. Since then, the company has faced mass layoffs, the closure of acquired verticals, and the exit of key employees, including co-founder and CTO Hemesh Singh. However, it has also launched several offline centers and recently entered the language learning segment with a new app.
At the beginning of FY24, the company claimed it was close to achieving group-level profitability. Although the audited annual report for FY24 has yet to be filed, Unacademy reported a 26% increase in operating revenue to Rs 907 crore in FY23, while losses were reduced by nearly 40% to Rs 1,004 crore.
Edtech companies have been facing tough times, including once-dominant Byju’s and several growth-stage startups. According to data compiled by TheKredible, edtech companies raised only $138 million across 21 deals in the first half of 2024. In contrast, edtech startups raised $456 million in 2023, $2.3 billion in 2022, and $5.8 billion in 2021.