Unacademy’s Latest Bet: Cohesive Pivots To AI Content Generation

In less than one year, Unacademy’s Cohesive ‘experiment’ has gone from a SaaS product for software developers to a SaaS marketplace and now to AI-generated content. And with this, the company has also formally joined the Unacademy Group, cofounder Hemesh Singh said in a tweet thread about Cohesive’s latest pivot to generative AI.

Given the hype around ChatGPT and GPT 4.0 in particular, the jump to AI-generated content is not surprising and might actually be a way for Unacademy and Cohesive to finally get users at scale, since this is a free offering at the moment that targets businesses as well as individuals.

In a Twitter thread, Unacademy cofounder and group CTO Hemesh Singh unveiled the latest avatar of Cohesive and has taken charge of the platform going forward. But what is not clear is whether this is the final form of the Cohesive product, and of course, how Unacademy hopes to monetise this going forward.

Cohesive and Unacademy’s AI Spin

Inc42 has already written extensively about Unacademy’s various product experiments in the past and the several pivots for its products, including at Cohesive, Relevel, Graphy and even with the core Unacademy platform which has moved towards a hybrid model.

When we last spoke about Cohesive, it was envisioned as a software development environment that enables product teams to test and deploy code. Then in February this year, Inc42 learnt that Cohesive pivoted to a SaaS marketplace, offering smaller tools developed by individuals.

Till March this year, Cohesive was selling SaaS products for email marketing, CRM optimisation, social media management and more. These products were developed by third-party companies or individuals. Here’s a screenshot from March 08, 2023 showing Cohesive’s SaaS marketplace:

It was only on April 01, 2023, that Cohesive’s website was overhauled to its current form.

Inc42 tested Unacademy and Cohesive AI’s skills by offering it essays and headline challenges and while it was not exactly the best AI-generated content we have seen, there does seem to be enough potential in this product in terms of how it is positioned.

Cohesive AI offers features such as text generation for various disparate contexts, including ecommerce customer success and marketing content, social media management, HR management, legal and compliance needs such as privacy policy drafting, besides grammar correction, headline writing and more.

To its credit, Cohesive AI covers a range of use-cases and even has some catchier features such as song lyrics generator, which is likely to drive some casual organic traffic. But more seriously, it also allows users to create content for ad copies across platforms such as Google, Facebook, LinkedIn, Twitter and Amazon.

The latest product from the Unacademy Group has three key pillars — an AI-powered editor, templates powered by generative AI, and an AI-based tool called Inspiration that generates prompts for users.

Unacademy says it will serve four key verticals or functions which cover most use-cases for its potential customers – sales, marketing, support and personal communication. Further, Singh claimed that Cohesive AI has already seen more than 10K users in the past two weeks.

Net Widens Beyond Edtech

With this latest pivot to AI content, Cohesive is now a core part of the Unacademy Group along with the Unacademy flagship edtech product, and creator-focussed Graphy, which Singh claimed has 100K+ users currently.

Curiously, there was no mention of Relevel in this trio. But we do know that Relevel has also gone through a slowdown in the past year in its placements-centric model with cohort-based learning and certification courses.

Notably, Cohesive is run by Unacademy Inc, a company incorporated under Delaware laws and is HQed in the United States of America, as per a previous version of the website. However, Cohesive AI does not seem to have any privacy policy or terms of use documentation at the moment and we don’t know whether it continues to be run by Unacademy Inc.

The company has had to reprioritise a lot of its costs in this process and has spent more considerably on the offline expansion side.

Unacademy’s parent company even set up a new subsidiary last year called Sorting Hat Solutions Private Limited to operate its offline or hybrid learning business. Sorting Hat Solutions got cash infusions from the parent Sorting Hat Technologies Private Limited to the tune of INR 240 Cr in 2022, as per filings reviewed by Inc42.

We don’t know how much revenue Sorting Hat Solutions earned last year, since it is yet to file its financial statements for the just-concluded FY23.

AI Content Bet Vs $350 Mn Loss

Unacademy, like several other loss-making startups, has been in the market to raise funds since last year. But with investors only deploying funds in startups that are on the right track, the edtech unicorn has had to make deep cuts to stretch its runway as much as possible and also show investors that there is some path towards profitability.

Cohesive AI launch comes two weeks after Unacademy fired another 12% of its staff in its bid to become profitable as soon as possible. The Bengaluru-based edtech giant has been reeling from a slowdown in adoption for online learning, which has forced many startups to retreat from verticals and also focus on expanding physical learning centres for the hybrid model.

Unacademy saw its consolidated losses widen to INR 2,848 Cr ($350 Mn) in FY22, up 85% year-on-year (YoY) from INR 1,537 Cr in FY21. Revenue from operations saw an 80%-plus gain in the year to INR 719 Cr, but this did not pull the Gaurav Munjal-led group out of the red.

Employee benefits costs made a major dent on the profitability, accounting for 43% of all costs. This was particularly due to the slew of stock options that Unacademy rolled out to retain talent in FY22 as it raised millions in VC dollars.

For instance, non-cash ESOP costs of INR 1,235 Cr saw a 3X jump in FY22, which indicates just how much the company was spending on retaining employees through ESOPs.

However, in late FY22 and since the beginning of FY23, Unacademy has had to retreat from a number of verticals. It reshuffled teams in various products, was in the news for allegedly poaching star teachers from offline coaching institutes, and of course, layoffs.

As per Inc42’s startup layoffs tracker, Unacademy has let go of over 2,000 employees or roughly 25% of its workforce. At the same time, it is looking to invest in expanding its offline base to more cities in India, and compete with the likes of BYJU’S-owned Aakash, Vedantu and PhysicsWallah.

Even if the company turns its offline play into a major money-spinning business, Unacademy will be in the market for more funds as it looks to scale up its various products and expand its offline base.

Unacademy’s Canva-esque Play

For Unacademy, Cohesive AI is a bet towards becoming a Canva of the generative AI content world. Generative AI is going through a major groundswell right now and this is the time for startups such as Unacademy to leverage this emerging technology for new products. There are obviously uncertainties such as AI regulations, the presence of big tech companies and of course a slew of GPT apps that are dropping each day. These are the challenges that Unacademy has to overcome with its AI-generated content platform.

Sustainability will be key for Unacademy and the generative AI bet seems to be a cost-effective go-to-market strategy for 2023. Given that the edtech pivot will require a lot of resource and budget allocation, Cohesive’s move to a relatively low-overhead generative AI model might be sensible, if Unacademy manages to crack the monetisation puzzle.

One can even see Unacademy utilising Cohesive to create or update course content in the near future, which would be one way to reduce people costs in the longer run.

Right now, the biggest question for Unacademy Group, Gaurav Munjal and Hemesh Singh is whether this is another stopgap play for Cohesive AI, which contrary to its name has had a rather scattered existence.