Chief Executive Officer of Ed-tech company Unacademy, Gaurav Munjal, said on Monday that the financial management of the company is currently not efficient at all. He also stated that the company is planning to shut down some affiliated businesses in order to conserve cash.
Gaurav posted a slack post in which he talked about how the company was inefficient in spending money. According to him, crores of rupees spend on travelling for employers and educators were unnecessary expenses. Sometimes such expenses are needed, but not all the time.
He said that all the extra unnecessary expenses must be cut and turn profitable as soon as possible. Gaurav Munjal also mentioned in his post about the plans of Unacademy to go public within two years.
The company should attain a positive cash flow and therefore cutbacks are necessary in case of expenses as an Initial Public Offering within two years is already on cards.
He added that even though these changes regarding expenses in the company might give out a wrong message that the company is financially in a bad state, it is not. The company is currently doing a great job financially and its next objective is to attain profitability.
Other cost-cutting measures will include salary cuts. Top office bearers have already taken salary cuts and soon management and employees would have a salary cut.
Privileges such as drivers for CXOs and business class travel for management would also be stopped to avoid unnecessary expenses.
Gaurav Munjal also stated in the post that the company currently have over 2800 crore rupees in the bank account, but that doesn’t mean the business was efficient.
A few months ago, Unacademy sacked nearly 1000 employees from various departments in the company. Most of the employees who got sacked were employed under Unacademy as contract workers.
In May, CEO had given a warning to all employees that there is going to be cost-cutting measures implemented in the company to achieve profitability.
Unacademy which started as a YouTube channel in 2010 by Gaurav Munjal later got established as an education company in the tech city of India, Bangalore.
Series C, Series B and Series A funding of Unacademy attracted $21 million, $11.5 million and $4.5 million respectively.
The series E funding round of Unacademy in February 2020 saw some big investors such as General Atlantic, Facebook, and Flipkart CEO Kalyan Krishnamurthy investing nearly $110 million in the ed-tech company.
This investment skyrocketed company’s valuation to $510 million