SoftBank-backed Unacademy has hived off coding platform CodeChef into a separate entity, a move that will help the edtech unicorn in trimming non-core expenses as it looks to turn profitable.
Unacademy will make a one-time investment into CodeChef and the company, with effect from April 1, will be an independent company owned and run by the current team and not under the umbrella of any organisation, the coding platform said in a tweet.
Unacademy’s one-time investment will be of Rs 3 crore and the company will hold a 30 percent stake in CodeChef, according to a person with direct knowledge of the matter.
“In the past, we never really focused on the financial viability of CodeChef, but being generously supported by Directi, and later by Unacademy, allowed us to keep doing our work without worrying about the financials,” the coding platform said in the tweet.
“But recently, due to the larger global economic slowdown, it has become clear that this cannot continue, and we need to find ways to sustain ourselves,” the company added.
Unacademy acquired CodeChef in June 2020 in order to launch a coding vertical for schoolchildren using the platform's capabilities. CodeChef was a non-profit venture and was previously run by Directi. The company was fully integrated with Unacademy’s parent company--Sorting Hat Technologies.
CodeChef, which was founded about 14 years ago, assists programmers in learning computer programming through active participation via contests. Directi and CodeChef’s founder Bhavin Thurakia has been on Unacademy’s board since 2017.
Unacademy acquired CodeChef in an effort to challenge its top rival, Byju's, which had earlier bought WhiteHat Junior with a similar goal. Unacademy's plan to hive off CodeChef comes at a time when the online coding learning platform market seems to be struggling post-Covid.
Byju’s founder and CEO Byju Raveendran has talked about the struggles of WhiteHat Junior in many of his recent media interviews. In fact, according to media reports, Byju’s has also discussed shutting down the coding platform. Byju’s, however, has denied those claims.
However, in a tweet, Unacademy’s co-founder and CEO Gaurav Munjal said, “CodeChef will run independently moving forth. I am extremely confident in the team’s ability to make CodeChef 10x bigger.”
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