Edtech unicorn Lead School has sacked nearly 60 more staff in its second round of layoffs in less than six months.
Employees of the tech and product teams have been impacted, news portal Inc42 first reported the development, citing sources that said a couple of its products have been struggling. However, a Lead spokesperson said the layoffs were done as part of the company's annual business cycle.
“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,” said the spokesperson. “This is a regular business activity and a normal churn of 1 - 2 % in an organization of 2,000 people."
In August 2022, Lead had laid off about 100 employees from its team to conserve cash. Even then, the company had attributed this to its annual performance appraisal process.
In the last year, layoffs at edtech companies have become a common sight as they struggle to raise cash amid tough market conditions. More than 8,000 employees working in the segment have been sacked in 2022 by edtech firms, which include several unicorns. Some of the largest Indian edtech companies to have let go of employees include Byju’s, Unacademy and Vedantu.
The re-shift of education from online to offline has presented immense challenges in front of such startups, especially those operating in the business-to-customer (B2C) space.
Mumbai-based Lead entered the unicorn club in January last year, after it had raised $100 million in a Series E funding round led by WestBridge Capital and GSV Ventures. The company was valued at $1.1 billion post the round.
The firm also counts Elevar Equity and GSV Ventures as its investors. So far, Lead has raised $175 million from marquee investors.
The company, founded in 2012 by Sumeet Yashpal Mehta and Smita Deorah, offers core schooling courses with its tech-integrated solutions. It recently agreed to acquire Pearson’s local K-12 learning business in India, which would help it expand its reach to 9000 schools in India.
Last week, VCCircle reported that the company’s losses had widened by over 3 times to Rs 397.1 crore in FY22 from Rs 126.1 crore in FY21, owing to higher customer acquisition costs.
The WestBridge-backed company’s revenue more than doubled to Rs 133.2 crore from Rs 57.1 crore, as per the audited annual financial results available with the Registrar of Companies.