Exampur, a test-prep startup specializing in government exam preparation, is facing financial difficulties, leading to unpaid staff salaries and unsettled full and final (F&F) payments for employees who left the company this year.
The salary backlog dates back to July. The company’s co-founder, Vardaan Gandhi, attributed these issues to a failed acquisition by edtech unicorn upGrad and a subsequent shortage of funds, Moneycontrol reported.
The impact of the failed upGrad deal
The acquisition by upGrad, which was called off four months after its announcement in August last year, has significantly impacted Exampur.
Gandhi said that the company had to scale down operations, resulting in the reduction of their YouTube channels from 24 to 9 and a decrease in employee strength from about 650 in January to around 200. He explained that this scaling down included laying off some employees and others leaving due to delayed payments.
Financial struggles and management’s efforts
Gandhi revealed that to keep the company afloat, he and his co-founder sold personal holdings and mortgaged belongings. Despite these efforts, the company faced months where salaries were delayed.
He also said that Exampur remains cash-positive and expects to pay off December salaries by the end of February. Employees will be given an option to convert the accrued salary into equity, he said.
Plans for paying off employee dues
Regarding the payment of dues to ex-employees, Gandhi claimed that the employees would receive their dues in the next three to four months, with the first tranche of payment expected by January 31. He also claimed that the company has become cash-positive and booked a profit of about Rs 15 lakh on a topline of Rs 23.62 crore in FY23.
The broader context of edtech challenges
The situation at Exampur reflects a broader trend in the edtech sector, where many startups are struggling due to investor skepticism and a general funding winter. According to Tracxn, Funding for Indian edtech companies dramatically dropped to $712 million in 2023, down from $5.33 billion in 2021.
This led many so-called edtech startups to make severe cost cuts and lay off employees to extend their cash runway amidst uncertainty about future funding. While some startups are focusing on achieving profitability, others are still struggling to survive and pay their dues.
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