“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 ET. “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.”
Yadav said all employees including teachers have been paid severance amounts and almost everyone has been placed elsewhere.
Founded in 2019 by Karan Varshney, Mahak Garg and Yadav, the Gurugram-based startup offers learning and education services for students in the kindergarten to eighth class and was catering to around 5,000 students each month.
The startup was looking for buyers for its core product – English learning courses – but that did not materialise.
“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.
Discover the stories of your interest
Udayy raised around $10 million from US-based Norwest Venture Partners in February. It
raised $2.5 million in seed funding a year ago. “We returned around $8-$8.5 million to the investors,” Yadav said.
Many tech startups have either shut down or restructured operations.
In February, edtech startup Lido Learning also announced that it was shutting down, citing similar reasons. Last week,
edtech platform FrontRow announced layoffs as the company went into restructuring mode to increase efficiencies and lengthen its runway
After years of hypergrowth, edtech firms are now bracing for a slowdown in funding and a few, including Unacademy and Vedantu, have retrenched employees to cut costs.
Last week, Unacademy founder Gaurav Munjal, whose company let go over 1,000 on-roll and contractual staff recently,
told employees in an email that “winter is here” and that cost-cutting would be the company’s key focus as funding would remain scarce for at least the next 12-18 months.
Several edtech firms are presently venturing into hybrid learning models that involve both online and offline learning. However, Udayy could not tap into that segment.
“We evaluated the offline mode of learning; however, we were very early stage and the growth through offline would have been very difficult,” Yadav said.
The startup was operating at an average revenue run rate of Rs 1-2 crore a month.
“We had never existed before the pandemic, so the transition was very difficult. The market we had taken a bet on was not really existing and customer acquisition cost was going up heavily,” Yadav added.
