The current times are difficult and founders will have to take tough calls, said Vamsi Krishna, Chief Executive Officer and Co-founder of Vedantu. Krishna said that a funding winter is around the corner for the startup ecosystem, but it is due to common business cycles, and resilient companies will persist and come out stronger.
In a recent interview with Moneycontrol on the show Bits to Billions, Krishna said, “Yes, these are tough times, tough calls have to be taken. As an entrepreneur, these things are very de-energising. But I also believe that very strong companies arise out of those opportunities.”
Krishna's comments come at a time when the edtech unicorn laid off 624 employees, or more than 10 percent of its workforce, citing a possible scarcity of funds in the coming quarters amid a slowdown in global financial markets.
Also Read: Vedantu to lay off 424 employees, blames 'scarce capital'
Vedantu’s move of laying off 624 employees in total comes amid murmurs that the edtech sector in India is slowing down with schools and physical tuition classes reopening, thanks to decreasing COVID-19 cases across the country.
According to Krishna, past cycles are repeating. He said, “In 2015, we had a huge funding spree, a lot of companies were getting funded. And then in 2016, the terms were eerily similar to the current environment. It was a funding winter.”
Krishna believes that currently, founders should focus on survival as growth can wait, but survival cannot.
To be sure, the edtech sector had witnessed two consecutive years of hypergrowth after the country had to lockdown millions of students indoors in 2020 to curb the spread of the contagious COVID-19.
Edtech unicorn Vedantu Innovation is the latest edtech startup nearly eight months after becoming a unicorn to lay off employees joining the likes of Unacademy, and Lido Learning.
Krishna believes that while the nine to 9.5 times hypergrowth has ended, the company is still growing sustainably, which he looks forward to in the long run. He added, “If a small cycle of one or two years shakes your company to the core and out of existence, then there's something fundamentally wrong with the company itself.”
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