More than 30% of the content and graphics teams at Edrolo have been made laid off.
👉 Background: Edrolo is an Australian education startup that launched back in 2011 with teaching resources for schools and their students. The plan was to take on the global behemoths like Cambridge and Jacaranda with a digital offering for students.
👉 What happened: Since its launch, Edrolo has partnered with thousands of schools across Australia. It also raised $40 million of capital from the big VC's like Blackbird Ventures, AirTree Ventures, as well as four superannuation funds.
👉 What else: But now, more than 30% of the content and graphics teams at Edrolo have been made laid off. Edrolo reckons AI has disrupted their industry, but at the same time, it has struggled to keep up with venture capital expectations.
💡Venture capital funding is like rocket fuel for startups. It can propel a company to new heights but also increase the risk of a crash-and-burn scenario.
💡When startups accept large amounts of VC money, there's an expectation of rapid growth. We're talking annual growth of at least 20-30% —and this pressure can lead to aggressive expansion strategies that aren't always sustainable.
💡Edrolo saw its revenue grow just 6% year on year yet it was clearly spending a lot more money trying to grow. Their profit went from $700,000 to a loss of $7 million in FY22. So clearly, the expansion strategy hasn't quite gone to plan.
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