India-based edtech startup Udayy shuts down after schools switched to the offline mode on June 1, 2022. Info-Edge backed edtech firm laid off 100-120 employees.
However, the startup helped its employees to find new jobs. Besides, Udayy provided them with severance packages. Meanwhile, the startup will return USD 8.5 million to its investors. The organisation has also refunded money to its customers.
Purpose of Udayy’s Shut Down
With the hike in inflation rates, startups find it hard to survive. While many firms resorted to firing employees, Udayy had to shut its operations in India completely. After the pandemic, the edtech firm suffered huge losses when the schools reopened.
Many edtech firms switched to hybrid learning models. However, Udayy could not resort to the offline mode as it was still in the early growth stage. The organisation also looked for buyers for its core learning course, i.e. English learning, but the deal didn’t materialise.
Udayy had its first angel funding in June 2019. Subsequently, in January 2021, the company raised USD 2.5 million in a seed funding round. Alpha Wave Incubation (AWI), managed by Falcon Edge Capital and InfoEdge Ventures, led the funding back then for Udayy.
Earlier, Lido learning, an edtech firm, completely shut its operations. The funding slowdown and its consequences severely hit edtech startups. More than 8000 employees were fired among the edtech firms. For instance, over 1,000 employees at WhiteHat Jr, more than 600 at Unacademy, more than 424 at Vedantu, and over 150 at Lido Learning were let go.
Meanwhile, FrontRow fired approximately 150 full-time and contractual employees this week.
What the founder has to say
“Udayy was witnessing the post-pandemic world for the first time. As the kids went back to school, we faced roadblocks in growing the original model of online, live learning. We evaluated multiple different strategies and adjacent pivots; however, none of them was promising enough,” said Saumya Yadav, co-founder at Udayy.
She further added, “After a lot of deliberation, we decided that it’s better to shut down the business than to spend more time and capital on it. Our investors, team members, and customers have been very supportive. We have refunded money to all our customers and paid a generous severance to our team members and teachers. We have already helped place nearly 100 per cent of our employees into new jobs at other promising companies. Our firm will return the remaining capital, around USD 8.5 million, back to our investors.”
About Udayy
IIT Delhi and Stanford University alumni Yadav, Mahak Garg, and Karan Varshney, IIT Delhi and Stanford University alumni founded the startups in 2019. Udayy is a live learning platform that caters to the students in Grades 1 to 8.
The startup served around 5000 students each month. The startup was operating at an average revenue run rate of Rs 1-2 crore a month.
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