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LIDO LEARNING 'Collapse of Growing EdTech'
"Every Fall is a Lesson in Rising Stronger"
Failures are prevalent in today's fast-paced startup ecosystem in India. Lido Learning's story is a prime example of this trend.
Let's examine the collapse of Lido learning and learn valuable lessons from this case study.
In the year 2016-19, the Indian Edtech industry boomed with digital learning providing visual and gaming experiences in learning, but after COVID, the Indian Edtech industry collapsed. Many startups failed, and Lido Learning was one of them.
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Founded in 2019 by Sahil Sheth, aimed to revolutionize education in India through its online platform, Lido Learning didn't make its journey longer in the Indian EdTech Industry.
Despite the support of well-known angel investors, such as Vijay Shekhar Sharma, Mukesh Bansal, Anupam Mittal, Ananth Narayanan, and Ronnie Screwvala abruptly shut down its operations in February 2022, leaving 150 employees.
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Let's review Lido's learning journey
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In its first year of operations, Lido Learning quickly established a presence in Tier 1 cities. By the end of November 2019, the company had grown to around 140 employees and secured $3 million in funding in its Series A round.​
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After six months, Lido Learning had over 2,000 paying customers and nearly 400 teachers. With these numbers, the company announced plans to expand its operations into Tier 2 and Tier 3 cities.
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Lido Learning secured funding of $10.5 million in the Series B funding round in March 2020.
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What Leads Lido Learning into the Failure Path
Lido was running low on funds despite having three successful funding rounds and attempting to secure more. However, those efforts fell short, ultimately leading to the shutdown of Lido Learning.
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1. Lido is already facing financial liabilities
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Lido Learning was facing a major financial crisis the company was having a tough time making its operational payments. Unable to pay employees salaries, failing to meet the refund requests of its customers.
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After securing a big round of funding, the company is facing debt issues, which shows something wrong with company operations. The company founder invested huge money to expand the business when internal operations were in huge debt.
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2. Impact of the pandemic
Lido's sales business model is also like Byju's, where salespersons physically have to visit parents' and student's homes to sell products.
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This gives a prime example. Copy doesn't work in the business world; as a founder, you have to always come up with new strategies to grow.
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3. Poor hiring culture
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After firing 50% of their current employees due to a financial crisis, the company again hired for similar roles and fired employees without pay. This affects the company profile negatively and makes the company culture more toxic with overwork.
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4. Unsatisfied customers
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Lido Learning has poor customer service, like not responding to customers on time and avoiding interaction with customers, which makes Lido Learning a bad platform full of negative responses.
5. Extending into different markets
Instead of marketing its business in India, Lido Learning expands its operations in other countries without making its business stable and profitable in India, which also leads Lido down the failure path.
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What steps Lido could have taken to grow in the Indian market
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Focus on profitability instead of depending on funds.
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Worked on company culture and management
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Focus on customers and work on feedback.
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Make the company stable in India first, then enter other countries.
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Come up with new strategies and business models.
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If Lido's founder works on company culture, profitability, stability in one country, and customer interaction, he will save his company from major downfall.
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In the world of funding and expanding rapidly without focusing on major sectors leads, India big startups lead into failure path.
No company will ever grow if you don’t work on company culture, customer feedback, and profitability.
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India startups take a major look at lido learning failure; instead of running into the funding world, they should focus on company internal operations.
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"You have to be willing to fail and fail fast because that's where innovation happens. Every failure teaches us what doesn’t work, so we can move closer to what does."
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Unnati!
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