Edtech unicorn Unacademy will be winding up the books for its global test preparation arm for the United States Medical Licensing Exam (USMLE). Launched earlier this year, the company has been unable to take the business to profitability.
The development comes a mere 5 months since Unacademy started its USMLE prep program. The USMLE is for MBBS graduate doctors and Specialised doctors like MDs and MSs to obtain license to practice medicine in the United States. The move marked the company’s first foraying into American territory.
The USMLE arm had a mere 15-20 employees working on it, all of which are expected to be relocated to other ventures of the company.
As Unacademy plans to move ahead with its IPO in the coming years, the company intends to prioritise profitability. It has thus informed employees in an internal note about global test prep arm shutdown, as well founders and management taking paycuts to mitigate expenses.
“Even though we have more than Rs 2,800 crore in the bank (as of this morning), we are not efficient at all. We spend crores on travel for employees and educators. Sometimes it’s needed, sometimes it’s not. There are a lot of unnecessary expenses that we do. We must cut all these expenses. We have a strong core business. We must turn profitable asap,” CEO Gaurav Munjal said in the note.
In addition to paycuts, the company will stop providing dedicated drivers to CXOs and will not be sponsoring business class travel for anyone, management and CXOs included. The company laid off around 1,000 employees earlier this year.
Further emphasising the need for the company to adopt a more frugal approach to survive the current downturn of the market, Munjal added “We have to do an initial public offering (IPO) in the next two years. And, we have (to) turn cash flow positive. For that, we must embrace frugality as a core value.”