Google-invested edtech startup Adda247 has laid off about 250-300 employees. This retrenchment has been done in different departments of the company. This layoff has been done for cost cutting, so that the runway time of the company can be increased.
Google-invested edtech startup Adda247 has laid off about 250-300 employees. This retrenchment has been done in different departments of the company. This layoff has been done for cost cutting, so that the runway time of the company can be increased. Actually, funding winter is going on at the moment, due to which many startups are not able to get funds. In such a situation, many startups have made layoffs and there are many who are planning to make layoffs. News agency IANS has made a tweet regarding this, in which it has given the news of layoffs quoting sources.
Why were there layoffs?
The biggest reason for this layoff could be the ongoing funding winter in the startup ecosystem, due to which startups are not able to get funding. Whereas in the year 2022, startups were getting funding every 3 hours, now in 2023 they are getting funding every 10 hours. There has been a decline of about 72 percent in funding in the first half of 2023 alone. Many startups are making layoffs at a rapid pace because they need cost cutting due to lack of funding. There are no funds and there is no money to pay salaries, hence layoffs are being done. All this is happening due to lack of funding. In the year 2021, a lot of funding was received and many startups became unicorns, but from the month of March-April last year, the funding started declining which is continuing till now.
How bad this year has proved to be for the Startup Ecosystem can be gauged from the latest reports related to funding. In the third quarter of 2023 i.e. July-September, startups have received the least funding in the last 5 years. According to market intelligence firm Tracxn, startups have received funding of only $1.5 billion during this period. If we talk about the same period last year, then on year-on-year basis, there has been a decline of about 54 percent in Startup Funding. There has been a decline of about 29 percent in funding as compared to the previous quarter.
According to Tracxn- India Tech Quarterly Funding Report, if compared with the same quarter last year, there has been a decline of 33 percent in last-stage funding rounds. At the same time, there has been a decline of 74 percent in early-stage funding. Apart from this, there has been a decline of 75 percent in seed-stage funding. In the third quarter of this year, there have been only 5 funding rounds which were larger than $100 million. Companies like Perfios, Zepto, Ola Electric, Ather Energy and Zyber 365 have been involved in this. Among these, Perfios has received the highest funding of $229 million in the Series D round.
In October last year, Adda247 raised $35 million in a round led by WestBridge Capital. The round saw Google as a new investor. The funding round also saw participation from the existing investors, including Info Edge and Asha Impact.
Founded by Anil Nagar and Saurabh Bansal in 2016, Adda247 caters to the learning needs of millions of students from tier 2 and 3 cities. Meanwhile, edtech major Byju’s has announced to lay off 4,000-5,000 employees in a “business restructuring exercise”. The startup has eliminated more than 10,000 positions in the last two years.
