SUMMARY
While the number of employees laid off could not be determined, Practically’s headcount has been reduced by 190 employees since mid-August 2022
The startup is in the process of restructuring its business model, shifting its focus to the B2B vertical
Practically is an edtech platform that leverages AR, VR and mixed reality to enable immersive education for STEM subjects
Hyderabad-based K-12 STEM edtech startup Practically has laid off some employees amid a cash crunch as its last funding round did not materialise. The startup has also failed to pay the salaries of the impacted employees.
While the number of employees laid off could not be determined, Practically’s COO and cofounder Charu Noheria, in a statement, said that the headcount has been gradually reduced by 190 employees since mid-August 2022. The edtech startup had to let people go to stabilise the company, Noheria said.
The development was first reported by Moneycontrol.
Noheria cited the failure of the startup’s last funding round as the reason for the layoffs. Practically had signed a term sheet for $5 Mn in May. However, the macroeconomic conditions prevented the investors from wiring any money, which resulted in a cash crunch at the startup, the COO said.
“This led to severe cash shortage for the growing operations forcing us to rethink the business verticals and impacting the cash-burning operations like B2C sales and related verticals,” Noheria said.
According to the COO, Practically’s current investors have helped stabilise the startup by providing bridge funding. The funding is expected to hit the edtech startup’s bank account in mid-November. “Practically is fully committed to fulfilling its obligations to all stakeholders, especially to its current and past employees,” added Noheria.
Practically is also in the process of restructuring its business model, shifting its focus to the B2B vertical, and this resulted in the said layoffs.
“Considering all aspects, we have decided to focus on the soon-to-be profitable business lines – India B2B, international markets, and partnerships, and will substantially trim down the B2C business. To align to this change, we will have to restructure the company, and this will impact teams who would be redundant after this restructuring exercise is done,” said the K-12 edtech startup.
Speaking on the matter of payment obligations to employees and contracts, Practically said, “We are days away from signing multi-year large B2B deals, beyond the bridge capital infusion by the current set of investors, which will help us to recover from the current situation and take care of the payables.”
Practically had last raised $4 Mn in January 2021 in a Pre-Series B round. The startup has raised close to $9 Mn from investors such as Siana Capital, YourNest Venture Capital, IDFC Parampara and HNIs.
Founded in 2014 by Noheria, Subbarao Siddabattula and Ilangovel Thulasimani, Practically is an edtech platform that leverages augmented reality (AR), virtual reality (VR) and mixed reality to enable immersive education. The platform offers immersive videos, interactive AR courses and 3D simulations to help students with STEM subjects.
The development comes when the K-12 segment within edtech is suffering as funding dries up and schools and coaching centres open up. With the layoffs, Practically has become the 45th Indian startup and 15th edtech startup to downsize in 2022, taking the total number of laid-off employees to 15,898, according to Inc42’s ‘Indian Startup Layoff Tracker‘.
With normalcy returning to the country after the pandemic-led disruption of two years and schools and coaching institutes reopening, the edtech segment has been hit hard in particular. The return to schools and coaching centres has resulted in a drop in sales of edtech startups, leading to a reduction in liquidity and layoffs.
BYJU’S, Unacademy, and Vedantu are among the edtech startups which have laid off employees in 2022 so far. Over 7,000 employees have been laid off by edtech startups in 2022 so far. Besides, edtech startups Udayy, Crejo.Fun, Lido Learning, Qin1 and SuperLearn have shut operations this year.
