Doubtnut, an edtech platform founded in 2016 by IIT Delhi alumni Tanushree Nagori and Aditya Shankar, has reportedly undergone a reduction in personnel amid potential acquisition talks with several businesses. The Gurugram-based startup faced difficulties securing new capital, leading them to consider takeover opportunities. However, potential acquirers showed disinterest in the edtech platform due to high burn and poor revenue. Consequently, Doubtnut had to downsize its employees by 30-40%.
While rumors of an acquisition circulated, Nagori refuted them, stating that there haven’t been any acquisition-related discussions in the previous 6 to 8 months. She also confirmed that the reduction in personnel happened more than six months ago and there have been no layoffs in the last two quarters. According to her, Doubtnut’s monthly burn decreased by more than 80% to Rs 2.2 crore in March 2023 from Rs 10.6 crore the previous year, and the company reported sales of Rs 27.6 crore in FY23, an increase of almost 50% from the previous year.
Doubtnut’s annual financial accounts filed with the Registrar of Companies showed revenues of Rs 15.2 crore and losses of Rs 179.2 crore in FY22. Its overall expenditures for FY22 came to Rs 194.4 crore, including Rs 72.4 crore in employee benefits or Rs 6 crore each month. The company’s monthly burn for employee perks has dropped by more than 80% to a little under Rs 1 crore, signaling a fall in the workforce. In the previous six to eight months, the company had also shut down its banking, SSC, and other public commission preparation verticals.
The company hopes to break even in the next 10-12 months and has decided to focus on fewer categories to be profitable. Nagori stated, “But on that path to be profitable, we may have decided to take a small break on a few categories.” Doubtnut has raised a total of $49.9 million in funding over six rounds, including $30.8 million in a Series B round in January 2021 from SIG Venture Capital, Sequoia Capital, and others, according to Tracxn. Nagori added that the edtech platform has raised $2.5 million through convertible notes in a funding round from existing investors, who are “supporting us for runway that we need until we break even.” After a time of intense pandemic-driven boom, the edtech industry has been in disarray due to the return of traditional classroom settings and a funding freeze, severely hurting ed-tech companies.