Around 250 fresh recruits of the data science training platform International School of Engineering (INSOFE), owned by upGrad, staged a protest in Hyderabad on Tuesday (April 18) after the startup allegedly announced it was closing its operations in the city, impacting around 700 hires.
Many protestors alleged that the edtech had lured them with science and AI courses and assured them employment at the end of the courses. The local police added that the edtech platform had taken private bank loans in the name of the employees.
In response, Dr Dakshinamurthy Kolluru, cofounder and CEO of INSOFE and Sridhar Pappu, president of UGDX, said in a statement that the trainees had either self-financed or taken loans from the platform’s NBFC partners, denying the allegations that it was shutting down operations in Hyderabad.
The executives added that the startup would take care of their loans in the next 15 days and the trainees would receive the NOC from banks within 45 days. They further stated that INSOFE has already cleared loans for 200 people.
Incidentally, none of the protesters decided to press charges against INSOFE. A police officer on the spot told the publication that the protestors were trying to reach an agreement with the company to compensate them for their losses.
INSOFE was founded in 2011 by Sreerama K. Murthy and Dakshinamurthy Kolluru. It has a presence in the US, UK, France, Canada and India. The platform offers master’s and doctoral programs in data science, AI and machine learning in partnership with India and US-based universities.
The data science training institute was picked up in a $33 Mn share-swap deal by upGrad in May 2022. At the time of the deal, upGrad said in a statement that INSOFE’s revenue would cross $13 Mn (INR 100 Cr) in 2022 and it was profitable.
The protests highlight the challenges faced by edtech firms in the highly competitive Indian market, where several firms are fighting for market share, often at the cost of profit margins. The pandemic has led to an unprecedented boom in online learning, which has given a boost to edtech companies. However, many of these companies are yet to turn profitable, leading to concerns about their long-term sustainability.