News: Edtech layoff: DoubtNut shakes things up with workforce cuts and acquisition quests

Strategic HR

Edtech layoff: DoubtNut shakes things up with workforce cuts and acquisition quests

Doubtnut, a startup headquartered in Gurugram, has confirmed that it has implemented workforce rationalisation measures but emphasised that these actions were taken more than six months ago.
Edtech layoff: DoubtNut shakes things up with workforce cuts and acquisition quests

Over the past year, Doubtnut, an edtech platform, has reportedly undergone a reduction in its workforce while engaging in potential acquisition talks. Co-founder Tanushree Nagori confirmed that the workforce rationalisation took place over six months ago and denied any rumours of acquisition.

As per the YourStory report, Nagori stated that there have been no layoffs in the past two quarters, and she also mentioned that there have been no discussions or conversations about acquisitions in the last 6-8 months.

The Gurugram-based startup faced difficulties in securing new funding, leading them to explore acquisition deals with different companies. According to a report by Entrackr, Doubtnut has also reduced its workforce by 30-40%. The report further revealed that potential acquirers were deterred by high burn rates and low revenue, which resulted in a lack of interest in the edtech platform.

Nagori shared that Doubtnut has significantly reduced its monthly burn by over 80%, from Rs 10.6 crore in the previous year to Rs 2.2 crore in March 2023. She also mentioned that the company's revenue for FY23 was Rs 27.6 crore, representing a growth of approximately 50% compared to the previous year.

As per the annual financial statements filed with the Registrar of Companies, in FY22, Doubtnut's revenue was Rs 15.2 crore, while its losses amounted to Rs 179.2 crore. The total expenses for the same period reached Rs 194.4 crore, including Rs 72.4 crore in employee benefits, equivalent to Rs 6 crore per month.

The same report also revealed that the company has managed to reduce its monthly burn on employee benefits by over 80%, reaching approximately Rs 1 crore, indicating a reduction in its workforce. The company has also closed its banking, SSC, and other public commission prep verticals within the past six-eight months. 

Doubtnut aims to achieve profitability within the next 10-12 months and has made the strategic decision to focus on fewer categories to achieve this, as mentioned by Nagori. "While we are on the path to profitability, we may have decided to pause or take a small break on certain categories," she added.

Doubtnut has secured cumulative funding of $49.9 million through six rounds, which includes a Series B round in January 2021 that raised $30.8 million from investors such as SIG Venture Capital, Sequoia Capital, and others, reported Tracxn.

Nagori confirmed that Doubtnut has successfully raised $2.5 million in funding through convertible notes from its existing investors. She further stated that these investors are providing support to Doubtnut to sustain its operations until the company reaches the break-even point.

Doubtnut, established in 2016 by Tanushree Nagori and Aditya Shankar who are alumni of IIT Delhi, provides students with immediate video solutions for their questions. 

The edtech industry experienced a period of rapid growth during the pandemic but has recently faced challenges due to the resumption of offline classes and a funding slowdown, impacting edtech companies significantly.

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Topics: Strategic HR, Leadership, #Layoffs, #HRTech, #HRCommunity

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