Udayy closed its operations in April and will return an amount of around $8.5 Mn to its investors. While the startup did well during the peak months of the pandemic, the reopening of schools slowed down business, said co-founder and CEO Saumya Yadav.
The company tried various other models, including exploring offline education centers, to sustain its operations, but without success.
Edtech Startup Udayy Shuts Down
The startup’s co-founder and CEO, Saumya Yadav, confirmed to Wednesday June 1 that the company was closed in April and that Udayy will now return around $8.5 million to some of its investors.
According to Yadav, Udayy was a pandemic baby and had never witnessed the world without the pandemic before. While he did well during the peak months of the pandemic, his business slowed after schools began to reopen.
Founded by Yadav, Mahak Garg, and Karan Varshney in 2019, Udayy’s core business was offering live learning courses for children in grades 1-5. Last year, the startup claimed it had users from more than 45 cities and Indian peoples. with more than 400 classrooms operating daily.
Once schools reopened and parents started spending money there, they were less willing to pay for the online educational technology platform. Additionally, students also had no time or energy for online classes, Yadav said.
Udayy started seeing signs of impending trouble as early as July last year and tried various other models to sustain its operations. The startup explored opportunities in offline education centers, but later realized that they were very expensive.
In addition, Udayy also released a free app. His goal was to first scale the app and then monetize it. While the app had a lot of traction, it was difficult to monetize as most people spent time on it because it was free, Yadav said.
We also evaluated partnering with schools where we realized that schools looked at edtech companies as their competition rather than a complement.
The development was first reported by Entrackr, which said the startup laid off more than 100 employees, representing 100% of its total workforce.
Confirming the development to, Yadav said that Udayy gave very generous severance pay to all of its employees. In addition, he also gave severance pay to his contract teachers.
In January of last year, Udayy raised $2.5 million in its seed funding round led by Alpha Wave Incubation AWI and InfoEdge Ventures. It also featured the participation of Better Capital, Kunal Shah of CRED and other angel investors. In February of this year, there were reports of the $10 million startup led by Norwest Venture Partners.
According to Yadav’s social media handle, the startup had raised $13.5Mn of institutional capital so far.
The edtech sector received a boost during the pandemic as schools and universities were closed and students relied on online classes and courses for their studies. Fueled by this boom, Indian edtech startups raised a total funding of more than $6.1 billion between January 2020 and December 2021. However, as the impact of the pandemic began to recede and schools began to reopen , these pandemic darlings began to face challenges.
In February this year, Mumbai-based edtech startup Lido Learning laid off more than 150-200 employees citing financial difficulties.
In April, Bangalore-based edtech startup Unacademy laid off some 600 employees, including its in-house staff and contract educators, just weeks after laying off some 210 educators.
Vedantu, the edtech unicorn run by Vamsi Krishna, also laid off more than 600 employees last month.
Some of the edtech startups like BYJU’S, Vedantu, and Unacademy have also started focusing on offline education centers to compete in the new business environment.