On the lines of its arch-rival Byju’s, edtech unicorn Unacademy has been on an acquisition spree since last year. The Tiger Global-backed company has acquired nine companies since January 2020, three of which have been just this year.
While most of these acquisitions were small and absorbed well at a group level, Mastree — one of its acquisitions in July 2020 — is yet to find a stable ground for Unacademy in the K-12 segment. According to two Entrackr’s sources, Mastree is going through the second round of pivot.
“Unacademy has moved about 70 employees from Mastree to its core business in the past few weeks,” said one of the people aware of the restructuring, requesting anonymity. “Mastree has been unable to crack the English and public communication courses in the K-12 segment,” the person added.
Mastree was building subscription-based STEAM (Science, Technology, Engineering, the Arts and Mathematics) courses in the K-12 segment. However, the company made a pivot within four-five months of acquisition with a new mandate: to build and scale English and public speaking courses for the K-12 segment.
“The new focus didn’t yield desirable results and Unacademy had laid off a major chunk of the Mastree’s sales team at the beginning of this year,” said the person quoted above.
According to a report by The Morning Context, the company had fired over 500 employees at Mastree. Entrackr couldn’t verify this number independently.
Sources further said that Mastree’s team size has shrunk to about 220 people from 300 after the recent restructuring. “Unacademy’s management has asked Mastree’s co-founders Shrey Goyal and Royal Jain to look for a new business line in the K12 segment,” said the second person who also wished not to be named. Unlike Maths and Science, selling soft skill courses like communication is tough as far as Indian parents are concerned. This could be one of the major reasons for Mastree’s struggle.
Queries sent to Unacademy and Mastree co-founders on Monday didn’t elicit any response. We will update the story in case they respond.
Unacademy had invested $5 million in the K12 learning platform, Mastree for a majority stake in July 2019. According to Fintrackr, Unacademy controls 43.09% stake in Mastree whereas Goyal and Jain hold 46.27% ownership. Mastree’s early-backer Blume Ventures sold a partial stake to Unacademy.
According to sources, Unacademy may decide to pull the plug on Mastree and move its employees to its other businesses if the company fails to find a new business line. “In case, Mastree isn’t able to map out a meaningful business case with the new pivot, Unacademy may think of shutting it down in a few months from now,” said the person quoted above.