SUMMARY
The layoffs come 5 months after the edtech unicorn laid off around 100 employees
LEAD’s standalone loss jumped 3.1X to INR 397.1 Cr in FY22 from INR 126 Cr in FY21
This is a regular business activity and a normal churn of 1-2% in an organisation of 2,000 people: LEAD
Mumbai-based edtech startup LEAD laid off around 60 employees earlier this week, in what was the second round of job cuts at the startup within 5 months, sources told Inc42.
The layoffs mostly impacted employees from the tech and product teams, the sources added.
Two products of the startup – Nucleus and Student App – have been struggling, the sources said.
In a statement shared with Inc42, LEAD said, “We have grown 2X this year and are hiring for growth. If projects don’t meet success criteria or don’t fit our strategic roadmap, teams are either re-assigned or asked to seek other opportunities. This is a regular business activity and a normal churn of 1-2 % in an organisation of 2,000 people.”
The latest development comes almost five months after LEAD laid off 100 employees. The edtech unicorn then said that the employees were sacked after their performance appraisal.
Last month, LEAD raised INR 35 Cr in debt from Alteria Capital. Last week, the edtech unicorn also entered into an agreement with the London Stock Exchange-listed education group Pearson to acquire its K-12 learning business in India.
Founded in 2012 by Sumeet Mehta and Smita Deorah, LEAD enables schools to combine technology, curriculum, and pedagogy in an integrated teaching and learning system. It claims that its integrated system is available to schools in over 400 towns and cities across India, reaching more than 1.2 Mn students and over 25,000 teachers.
The startup provides solutions such as digital resources, books, tech solutions, ERPs, and maths and science kits, among others.
LEAD became the first startup of 2022 to cross the $1 Bn valuation mark after raising $100 Mn in its Series E funding round from WestBridge Capital and GSV Ventures at a valuation of $1.1 Bn.
The startup’s standalone loss jumped 3.1X to INR 397.1 Cr in FY22 from INR 126 Cr in FY21. While revenue from operations rose 2.3X to INR 133.1 Cr from INR 57 Cr in FY21, expenses grew 189% to INR 538.7 Cr in FY22 from INR 186.5 Cr in FY21. Employee benefit costs contributed the highest expenses. LEAD’s employee benefit expenses stood at INR 258.7 Cr in FY22 , a 2.5X jump from INR 99.6 Cr in FY21.
The year 2022 was a difficult year for the entire edtech sector as the reopening of schools and educational institutions after two years of Covid-19 pandemic impacted the revenue of the startups. The ongoing funding winter further added to the woes. Consequently, many small startups like Lido, Crejo.Fun, and Udayy shut operations in 2022.
Besides, a lot of edtech startups also resorted to layoffs to cut costs and turn profitable. Edtech giants BYJU’S, Vedantu, and Unacademy were among those which conducted layoffs in 2022. Last week, Inc42 reported that upGrad-owned Harappa Education laid off around 73 employees, or almost 40% of its workforce, in December 2022.
As per Inc42’s layoff tracker, over 7,500 edtech employees were laid off in 2022.
