Edtech firm Doubtnut reduces workforce, explores acquisition deals: Report
The Gurugram-based startup confirmed rationalisation in terms of workforce, but added that this was done more than six months ago.
Monday April 10, 2023,
3 min Read
Edtech platformhas reportedly reduced its workforce amid potential acquisition talks over the last year.
Tanushree Nagori, Co-founder of Doubtnut, confirmed rationalisation in terms of workforce, but added that this was done more than six months ago. She denied rumours of acquisition.
"There have been no layoffs in the last two quarters," Nagori said, adding that in the last 6-8 months there have been no conversations around acquisitions as well.
The Gurugram-based startup has found it hard to raise fresh funding, explored acquisition deals with various companies, and reduced its workforce by 30-40%, an Entrackr report noted. High burn and low revenue were the reasons for potential acquirers' lack of interest in the edtech platform, the report added.
Nagori said that Doubtnut has slashed its monthly burn by more than 80% to Rs 2.2 crore in March 2023 from Rs 10.6 crore in the previous year. The company posted a revenue of Rs 27.6 crore in FY23, about 50% increase compared to the preceding year, she added.
In FY22, the edtech firm’s revenue was Rs 15.2 crore, and its losses mounted to Rs 179.2 crore, according to the company’s annual financial statements with the Registrar of Companies. In FY22, its total expenses added up to Rs 194.4 crore, including Rs 72.4 crore in employee benefits, which comes to Rs 6 crore per month.
The report stated that the company’s monthly burn on employee benefits has reduced by more than 80% to about Rs 1 crore, signifying a worforce reduction. The firm had closed its banking, SSC, and other public commission prep verticals in the past six-eight months, it added.
The company hopes to break even in the next 10-12 months and has decided to focus on fewer categories to be profitable, Nagori said. "But on that path to be profitable, we may have decided to take a small break on a few categories."
Doubtnut has raised a total funding of $49.9 million over six rounds, including $30.8 million in a Series B round in January 2021 from SIG Venture Capital, Sequoia Capital, and others, according to Tracxn.
The edtech platform has raised $2.5 million through convertible notes in a funding round from existing investors, Nagori said, adding that the investors are "supporting us for runway that we need until we break even".
Founded in 2016 by IIT Delhi alumni Tanushree Nagori and Aditya Shankar, Doubtnut offers instant video solutions to the questions submitted by the students.
The edtech sector has been in turmoil after a period of intensive pandemic-driven boom. The pandemic offered tailwinds for tremendous growth, but the resumption of offline classes and a funding winter have hit edtech firms hard.
(The story has been updated to reflect the comments from Doubtnut co-founder.)
Edited by Megha Reddy