People aware of the development said that around teams such as marketing, product, tech, with the sales team being impacted the most
The startup is offering severance payment based on the notice period of the employees
“At this juncture, restructuring at Prepladder is a necessary exercise, keeping in mind the company's goals and vision for the year..,” Unacademy’s spokesperson said
Unacademy
Group’s medical entrance test prep platform PrepLadder has undergone another round of layoffs as the company shifts its sales strategy.
This is the company’s third round of layoffs in the past three years. As per multiple Inc42 sources, the NEET prep platform laid off around 145 employees last week.
This is around 25% of the startup’s entire workforce of around 560 employees before the latest cutbacks, people aware of the development said.
Last week, the impacted employees received emails about the termination of their employment contract effective immediately.
People aware of the development said that employees across sales, marketing, product and tech teams were let go, with the sales team seeing the most number of layoffs.
As per sources, around 100 of the employees let go were from the on-field sales team — more on this later.
In a statement, Unacademy confirmed the restructuring exercise, but did not disclose the total number of employees impacted.
“At this juncture, restructuring at Prepladder is a necessary exercise, keeping in mind the company’s goals and vision for the year, as we focus our efforts on enhancing business efficiency. As a result, some roles have been impacted. While this transition won’t be easy, we’re going to support all our employees to ensure a smooth transition,” the spokesperson said.
The startup is offering severance payment based on the notice period of the employees. Besides, the company is also extending medical insurance to the impacted employees by five months.
Unacademy Taking The Reins?
As per multiple sources, the recent restructuring is a result of Unacademy getting involved in the startup’s day-to-day operations. To give context, the Gaurav Munjal-led Unacademy acquired PrepLadder in July of 2020 for $50 Mn.
The acquisition was done to strengthen Unacademy’s presence in the medical entrance examinations categories such as the National Eligibility cum Entrance Test (NEET) for medical postgraduate courses.
However, the Chandigarh-headquartered PrepLadder used to run independently.
“Since the end of last year we noticed that Unacademy has been getting more involved in day-to-day operations of the startup,” one of the sources quoted above said.
Another source echoed similar sentiment and added the layoff decision was taken by the Unacademy.
Sources said that PrepLadder has recently changed the KRAs of the sales team, which has resulted in downsizing in the field sales team. Prepladder is instead said to be expanding its inside-sale team.
“Prepladder has now asked the on-field sales team to host events at various medical colleges, whereas the inside sales team has been told to generate revenue,” one of the sources aware of the matter said.
If we have to talk about PrepLadder’s financials, the startup managed to reduce its losses by 44% to INR 79.9 Cr in FY23, from a loss of INR 144 Cr incurred in FY22. While the loss plummeted, the startup’s revenue increased by 27% to INR 145.8 Cr in FY23, from INR 114.6 Cr.
On a consolidated basis, Unacademy, which has acquired a number of startups including NeoStencil, Rheo TV, Spayee, among others managed to reduce its loss by 40% to INR 1,678.1 Cr in FY23, from INR 2,847.9 Cr. The startup’s operating revenue rose 26% to INR 907 Cr in FY23 from INR 719.2 Cr in the previous fiscal year.
To date, Unacademy Group has raised close to $800 Mn in funding across multiple fund round. Valued at $3 Bn, the startup counts Peak XV Partners, Tiger Global, Elevation Capital, General Atlantic, and Meta, among others as its backers.
