Why Unacademy’s Relevel Failed To Level Up


While Relevel has denied there have been any layoffs, employees were left to choose between either leaving the startup or taking up a new role in other parts of the Unacademy Group

Ironically, Unacademy group is downsizing the one part of the Relevel operations that was generating the revenue, because it couldn’t scale up this team without spending heavily

Unacademy employees allege the company is cashing in on their work, and many of them fear another round of layoffs is yet to come despite assurances by founders

Unacademy’s bad spell amid the major downturn in edtech continues as Unacademy Group’s Relevel product is the latest to go through a round of reshuffling. Relevel employees have been asked to go through interviews for new roles in other parts of the Unacademy Group.

While reports last week claimed that Relevel was forced to downsize due to a slowdown in hiring, the reality is that the reorganisation and downsizing at Relevel are a result of the startup’s lopsided revenue structure, which belies its publicly-claimed model of being a skill assessment plus job placements platform.

What Exactly Happened At Relevel?

Don’t call them layoffs. That’s the message from Unacademy, but the fact is employees have been put between a rock and hard place — choosing between either leaving the company or just taking up the new role without any assurances.

Unacademy declined to comment on the number of employees that have been impacted in this reshuffling, but sources told us 100 employees are part of the exercise, which was first announced as layoffs, but was later clarified to be an internal job movement.

Of the 100, up to 80% of these have been given new roles based on interviews and other criteria, while 15-20 employees are said to have declined roles. Several employees have resigned from their positions as they claimed the company was overburdening those retained at Relevel.

Sources said currently Relevel has around 700 employees while at its highest peak, the workforce was approximately 900 employees. Responding to speculation about the layoffs, a Relevel spokesperson said, “There are absolutely no layoffs happening anywhere across the Unacademy Group.”

This was reiterated a few days ago by Unacademy Group CEO and cofounder Gaurav Munjal. Relevel’s statement added, “At Unacademy, we are working towards profitability as a core objective, while ensuring all employees continue to have a bright future within the Group. Some employees at Relevel were moved to open roles within the Group where their skills and aspirations match with the new role. We strongly reiterate our commitment of no layoffs at the Unacademy Group.”

After laying off 1,150 employees in three cycles from the core Unacademy platform, the group has turned to Relevel in another bid to cut costs and restructure its operations. Besides this it has also suspended contracts of other educators that were part of the doubt-solving team.

When it comes to cost-cutting, the Unacademy group is downsizing the one part of the Relevel operations that was generating the revenue, because it couldn’t scale up this team without spending heavily. To understand why, we need to dive into the brief history of Relevel and its lopsided business model.

Relevel’s Strange Revenue Model

Relevel was launched in May 2021 with the promise of helping job seekers qualify for tech industry roles through assessment tests for programming, product development and more.

The team was led by Shashank Murali, the cofounder of Tapchief, which Unacademy acquired in February 2021. The edtech giant also acquired CodeChef in June 2020 prior to Tapchief and then launched Relevel. It also acquired Rheo TV in July 2021, following which Rheo’s cofounders Saksham Keshri and Prakash Kumar joined the leadership team at Relevel.

In the early days, it charged test candidates a fee of INR 1,999, but changed its approach by late 2021 after some criticism and removed the fee altogether.

Essentially, Relevel tests have been free since around August or September last year. Fair enough, the company should be monetising the recruitment side of the chain anyway, some might say. But as per sources Relevel was also not charging recruiting companies any commission for the candidates that had passed the test. So how was the company making money or running the business?

One part to the answer is a $20 Mn internal cash infusion from the Unacademy Group, before Relevel created a cyclical funnel of sorts with ‘Courses’ in addition to ‘Tests’.

A typical revenue funnel would involve grabbing users with a free offering and boiling this base down to paying users through engagement, product features or simply upselling. That’s the Unacademy test prep way indeed, but that is not the case with Relevel.

Because while the user journey ends with recruitment, in some cases, it takes a detour into paid courses. Relevel brought users in with the free tests and those who did not clear those tests were urged to sign up for courses priced between INR 90,000 to INR 2.5 Lakh.

But the courses made sense because the tests were super challenging for an average entry-level developer or candidate. The idea was a majority of candidates would only be able to clear the tests after taking these courses. And in some cases those who had already cleared the basic tests could upskill themselves and earn a higher paying job.

The below illustration helps visualise of Relevel’s cyclical funnel, where it recycles the users:

Revel by Unacademy User Journey

Though the courses were bringing in revenue, the costs associated with scaling up this part of the operations were much higher. The ‘Courses’ team was made up of edtech content creators, subject matter experts, customer service staff and sales executives, who needed to manage over 6K learners and 150 educators.

On the other hand, the ‘Tests’ vertical was largely made up of engineers, developers and product managers. Interestingly, even though Relevel’s tests were free, the company spent lavishly on rewards for some of the top-ranked candidates. The top three ranked individuals were given Apple MacBooks, iPhones, Apple Watches, iPads as prizes along with other gifts. It also spent on billboard ads in towns and cities where these top candidates came from, which is similar to how offline institutes promote their outcomes.



Relevel by Unacademy is currently said to be running 55 cohorts — with an average of 100 learners in each — and each cohort roughly brings in INR 50 Lakh. That could explain how Munjal was able to claim on social media in June this year that Relevel will reach $12 Mn ARR by the end of the year.

Relevel’s ARR Game

Of course, the ARR metric comes with a catch. The monthly revenue has to have reached $1 Mn at any point in the fiscal or calendar year — Munjal has not specified — for an ARR of $12 Mn.

It’s unclear whether Relevel has continued the momentum seen till June and if Munjal’s ARR claims have stood the test of the past two months amid the reshuffling. Because as per sources, course adoption has seen a slowdown, coinciding with Relevel taking employees off its payroll.

In the beginning of August 2022, Relevel is said to have started courses for 12 new cohorts to go along with the 43 existing cohorts. It’s unclear whether the company has managed to add more students since then to start new courses in September.

Unacademy declined to comment on the revenue growth or indeed whether the tests and placement were bringing in any revenue.

Sources allege that things might have been different if Relevel had figured out a way to unlock revenue from companies that recruit the candidates. Skill assessment is a crowded market as it is, but now Relevel by Unacademy would be competing with startups that have years of experience in this space.

The skill development and placement space already has well-funded players as WheeBox, AugLi, Perspect AI (formerly Loop Reality), HackerRank, upGrad Rekrut, Eight Roads Ventures-backed iMocha, HackerEarth, Talview, Scaler, Pesto Tech, Skillenza, Newton School among others.

Besides these, he likes of LinkedIn, Naukri.com and other job search platforms also have similar products that directly connect job seekers to employers.

Employees who were on Relevel’s ‘Courses’ team allege profiteering — claiming the company is cashing in on their work. “The company can simply keep selling these courses for a year or so and keep making money, but there’s a lot of day-to-day course management. They don’t have the people to do it,” a Relevel employee who had resigned at the end of July told Inc42.

Unacademy’s Priorities Change

It would seem Relevel was keen on projecting an image of being a jobs platform, even though it was earning nothing from that part of the operations and spending heavily on branding and marketing. It had ramped up hiring significantly in the past year and acquired companies to bolster Relevel.

Now as it looks to tighten its belt, the company is looking to reduce the incremental cost associated with managing and creating new courses, while integrating courses into the Relevel product.

Inc42 could not independently verify Relevel’s employee costs, but sources claim scaling up the revenue-generating courses team would have required considerable resources.

“It (Unacademy) does not want Relevel to become another Unacademy that was dependent on hiring more teachers. The focus is on bringing these courses into the product such that there is a more seamless funnel,” another employee who had resigned added.

Some of those who have joined new roles at Unacademy claim employee morale has improved compared to July, but there’s a lot of uncertainty among the employees.

Many fear that another round of layoffs might be imminent given that Unacademy is cutting costs across all its products. “We don’t know what will happen in two-three months. Now we are making courses for Unacademy but soon they might feel we are too expensive to retain even here,” said the employee quoted above.

Despite Relevel supposedly streamlining its operations to 700 employees, it remains unclear to what extent this workforce is being utilised. That’s where much of the fear about a new round of layoffs comes from.

For instance, some employees believe that if courses are integrated into the Relevel product, then many more employees are likely to be either moved around or might be asked to leave.

Reality Check For Edtech Giants

The Unacademy Group is yet to file its FY22 financials, so it’s hard to estimate whether the layoffs are simply rationalisation of costs or a way to show profitability on the books — at least on the standalone basis for Relevel if not on a consolidated basis.

We know that its expenses had shot up significantly in FY21. Overall expenditure rose to INR 2,029.9 Cr while employee benefit costs surged by a whopping 6X to INR 748.4 Cr in comparison to FY20.


Unacademy Losses Surged 6X in FY2021


It’s no secret that Unacademy is chasing profitability and Munjal said the company will be eyeing an IPO in two years. With 100 employees moving off of Relevel’s books, the P&L accounts will definitely be less burdened by costs.

Ironically, Unacademy is spending heavily to hire teachers for its offline operations. Fighting allegations of poaching by established players such as Allen Career Institute, Unacademy is said to have offered 2x-3x pay hikes to teachers, with annual income ranging between INR 1 Cr and INR 10 Cr, as reported by Inc42 in June.

As Indian edtech goes through the biggest churn in its short lifetime, amid business restructuring, pivots and instability, there are serious questions about the potential of edtech startups as job creators. More than 4,500 employees at edtech startups have been laid off in the first six months of the year. Many of them claim startups are sidelining them after banking on them to make hay during the boom.

While edtech startups have always sold a narrative of being changemakers, the spate of layoffs, impact on livelihoods and episodes of sudden restructuring indicate that perhaps this was a gross exaggeration. As companies consider the cost of running a loss-making business, those still at Unacademy, BYJU’S & co are waiting nervously and wondering if the cuts will get deeper.

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