SoftBank-backed Unacademy, India’s second-most valued edtech unicorn, has delayed the launch of its offline NEET PG institute called Prepladder Neuros as the company is struggling to enroll students across cities amid a mass exodus of star teachers from its platform.
Unacademy was planning to open Neuros in January across at least 10 cities but has postponed it to March, two people with knowledge of the matter told Moneycontrol. As many as 14 of the platform’s 19 doctors-turned-teachers, who were the face of PrepLadder’s growth, have resigned over the last four months and so the platform has not been able to get enough student registrations to open an institute, even in one city, the people said, requesting anonymity.
In November, through a Twitter blog, PrepLadder tweeted that Dr Gobind Rai Garg, Dr Vivek Jain, Dr Sparsh Gupta, Dr Praveen Tripathi and Dr Apruv Mehra were parting ways with PrepLadder. According to sources, nine more teachers have also resigned. These teachers are very popular among NEET PG circles. After these teachers resigned, PrepLadder’s monthly subscriptions have been down to almost a third, according to sources.
'Students not happy'
“Students really are not happy seeing so many teachers, especially the ones who are very famous within NEET PG circles, resigning. Many second-line faculties, who joined PrepLadder after the teachers (the 14 mentioned above) left, have also resigned. Student registrations are thus very disappointing,” said one of the people quoted above.
“Faculties that are with PrepLadder currently were asked for a commitment of 15 slots (batches), then it was reduced to 13, then 11 and finally five. But they eventually had to postpone it. What I am hearing is they might shelve the Neuros plans altogether. They have softly stopped all the advertising and marketing spends as there is no student response. They do not have even 50 registrations for Neuros at the moment while they were expecting 700-1,000,” the person added.
Unacademy did not comment on a detailed questionnaire sent to the company on January 22. The company's founder and CEO Gaurav Munjal also did not comment on the story, despite several reminders.
PrepLadder’s struggles to get student registrations for its offline coaching institutes come at a time when the company is at loggerheads with some of its star doctors-turned-teachers, who left the platform last year over slashed paycheques and amid allegations of deception. The company has also been taken to the Delhi High Court by one of its teachers, Dr Vivek Jain, over allegations of nonpayment of his dues and as many as six more teachers are mulling the option, Moneycontrol reported.
PrepLadder had plans to open centres in Bengaluru, Mumbai, Hyderabad, Lucknow, Delhi, Ahmedabad, Chennai, Indore, Jaipur and Kolkata, according to its website. According to the second person quoted above, PrepLadder Neuros has witnessed an “extremely low” response in some major cities like Kolkata, Lucknow, Bengaluru and Hyderabad, and so the company might not go ahead with opening its centres in these cities at all.
“PrepLadder Neuros applied for temporary GST (goods and services tax returns) in cities like Kolkata and Lucknow. When you have to do business, you file for permanent GST but they have filed only for temporary,” said the second person quoted above.
“In fact, PrepLadder also withdrew temporary GST from Lucknow and Kolkata, so we really don’t know if the company will be going ahead with its launch in these cities altogether,” the person added.
A company has an option to file for temporary GST in a new city, if it is expecting an annual turnover of as much as Rs 20 lakh from the city, for a maximum period of 90 days, a CA told Moneycontrol requesting anonymity, explaining the matter on background. If a company expects business for more than 90 days, it usually files for permanent GST. According to the CA, the company also has an option to renew its permanent GST application until it has a certainty of hitting Rs 20 lakh in annual turnover.
PrepLadder is Unacademy’s biggest acquisition to date and is important to the growth of the edtech unicorn’s growth as it contributes to nearly a fifth of the company’s consolidated revenue. Moreover, Unacademy has seen growth for its core business faltering this year, with physical tuition centres reopening amid the receding pandemic, making the performance of the company’s acquisitions even more important.
However, not just PrepLadder, Unacademy’s other acquisitions have also come under fire recently. In September last year, Moneycontrol reported how Relevel was alleged of unfulfilled promises by candidates. Earlier this month, the company decided to stop its core operations, which resulted in about 40 layoffs.
Unacademy has been trying to achieve company-level profitability and in September, Moneycontrol reported that the company was on track to achieve the feat by January 2023. In the process, it has undertaken close to 1,200 layoffs since the start of the year, reducing its headcount to half.
