Gaurav Munjal, co-founder of Unacademy and CEO, has announced that the ed-tech startup will not extend its affiliation with the Indian Premier League (IPL) for the 2023 season.
He posted, “The last three years with the IPL were fantastic,” in response to a user on Twitter. Our brand reached new heights. I advise any new brands to collaborate with the IPL. Our attention has shifted. Consequently, it was decided to skip the IPL in 2013.
In an internal email earlier on Monday, Munjal stated that the corporation “must embrace frugality as a core principle” if it is to become cash flow positive. In the following two years, the company plans to conduct an initial public offering.
This move to frugal living occurs at a time when funding for startups is tight. In May, Munjal announced that the business would concentrate on organic growth rather than splurging on advertising due to the prospect of “financial winter.” The ed-tech unicorn reportedly fired approximately 1,000 workers in April.
Even though we have more than Rs 2,800 crore in the bank (as of this morning), we are not at all efficient, Munjal noted in Monday’s mail. We spend millions of dollars on employee and instructor travel. It’s necessary at times. Occasionally, it’s not. We spend a lot of money that is not essential. All of these costs need to be reduced. Our primary business is robust. We must become profitable right away.
Pay reductions for the company’s founders and executives, restrictions on CXOs traveling in business class, and the closure of Global Test Prep, which has failed to discover PMF, are some of the cost-cutting measures (product market fit).
Unacademy joined as an official IPL partner in 2020. The three-season agreement was supposed to terminate with IPL 2022. The three-year contract, according to media estimates, cost between Rs 120 and Rs 130 crore.
The IPL has evolved over the past two years into the go-to media platform for businesses in the ed-tech, fin-tech, gaming, and e-commerce industries. These firms, some of whom are unicorns, overspent on IPL in their attempt to attract new users and establish themselves because they were flush with venture capital money.
According to a TAM analysis, ed-tech was the most popular advertiser category at IPL 2021. Ed-tech brand advertising fell off in IPL 2022, when it was the fourth most marketed category.
The television and digital media rights were recently awarded to Disney Star India and Viacom18, which is supported by Reliance, for a staggering Rs 48,390 crore each. This staggering amount will probably increase IPL advertising costs.
Unacademy’s decision to sever its ties to the annual sporting event may be the beginning of a larger trend of start-ups rethinking their exorbitant advertising expenditures, particularly on IPL.