As the schools have reopened, edtech startup Udaay has shut down its operations and fired about 120 employees. According to Saumya Yadav, co-founder of Udayy, although they had enough capital on the books, the business was no longer feasible in the offline world as customer acquisition costs became quite expensive. When the schools reopened, parents started asking for refunds saying kids don’t have time for online classes, added Yadav. All employees have been given severance pay.
The Gurugram-based startup was founded in 2019 by Karan Varshney, Mahak Garg, and Saumya Yadav offering learning and education services for students from kindergarten to Class VIII. It catered to about 5,000 students each month. The startup tried to sell its core product – English Learning Courses – but did not work out. Udayy had raised $10 million from US-based Norwest Venture Partners in February. Yadav said that they returned about $8.5 million to the investors.
Many other edtech startups face the same dilemma. In February, Lido Learning announced closing down citing similar reasons. Lately, FrontRow announced layoffs. Unacademy and Vedantu have also fired employees.
Many edtech firms are trying hybrid learning model that comprises both online and offline learning. Udayy could not tap into that as it was not in the market before the pandemic.
