Unacademy Reports First Ever Cash Flow Positive Month In June: CEO Gaurav Munjal

Unacademy Appoints Former CRED Finance Head Pratik Dalal As CFO For Offline Vertical

SUMMARY

June 2023 was Unacademy group’s first ever cash flow positive month since the company was started: Gaurav Munjal said in a tweet

In April, Munjal told Unacademy employees that the edtech startup was well set to ‘almost generate’ a profit at the group level in April

The development comes after a bumpy 2022, which saw the edtech major resort to mass layoffs to cut costs. It has fired over 2,000 employees so far since last year

Unacademy’s cost-cutting measures seem to be bearing fruits as the edtech major reported its maiden cash flow positive month in June 2023.

Unacademy cofounder and chief executive officer (CEO) Gaurav Munjal took to Twitter to announce the achievement. “June’23 was Unacademy Group’s first ever Cash Flow Positive Month since we started the company in 2015,” he said.

This comes two months after Munjal told employees that the edtech startup had significantly reduced its burn rate and was well set to ‘almost generate’ a profit at the group level in April.

This is in line with the company’s internal projections that target profitable numbers for its digital test preparation business between April and December 2023. It also aims to slash the EBITDA burn of the digital test prep vertical by as much as 99% year-on-year (YoY) in 2023.

The reversal of Unacademy’s fortunes stands in stark contrast with its peer BYJU’S, which is struggling to even post its financial numbers for the fiscal year 2021-22 (FY22).

The latest development comes after a bumpy 2022, when Unacademy resorted to mass layoff to cut costs. The startup has conducted four different rounds of retrenchments since the beginning of 2022, cumulatively firing more than 2,000 employees.

The biggest issue for the startup was its mounting losses, which it seems to have brought under control now. The edtech major reported a net loss of INR 2,848 Cr in FY22, up 85% year-on-year (YoY).

The flurry of acquisitions undertaken by Unacademy during the bull run of 2021 did not pan out as it hoped for. Consequently, the startup has made only one acquisition in 2023 so far in the form of Scenes.

Earlier, Unacademy, in an investor presentation, said it would have 116 months (9.6 years) of runway by the end of 2023.

Overall, the Indian edtech space has been pummelled by the funding winter which has made funding scarce and investors wary of pumping in capital in startups. This has been visible in the funding raised by homegrown edtech players. Edtech startups raised just $221 Mn in the first half of 2023, accounting for a mere 4% of the total $5.4 Bn funding raised by Indian startups.