UK Markets close in 7 hrs 37 mins

More layoffs at pivoting London ed tech startup pi-top

Natasha Lomas
pi-top's new device is a modular programmable computer designed for maker projects

London ed tech startup pi-top has gone through another round of layoffs, TechCrunch has learned.

Pi-top confirmed that eight jobs have been cut in the London office, saying the job losses resulted from "restructuring our business to focus on the U.S. education market."

In August we broke the news that the STEM hardware-focused company had cut 12 staff after losing out on a major contract; pi-top told us then that its headcount had been reduced from 72 to 60.

The latest cuts suggest the workforce has been reduced to around 50 -- although we have also heard that company headcount is now considerably lower than that.

One source told us that 12 jobs have gone in the London office this week, as well as additional cuts in the China office, where the company's hardware team is based -- but pi-top denied there have been any changes to its China team.

Pi-top said in August that the layoffs were related to implementing a new strategy.

Commenting on the latest cuts, it told us: "We have made changes within the company that reflect our business focus on the U.S. education market and our increasingly important SaaS learning platform."

"The core of our business remains unchanged and we are happy with progress and the fantastic feedback we have received on pi-top 4 from our school partners," pi-top added.

Additionally, we have heard that a further eight roles at the U.K. office have been informed to staff as at risk of redundancy. Affected jobs at risk include roles in product, marketing, creative services, customer support and finance.

We also understand that a number of employees have left the company of their own accord in recent months, following an earlier round of layoffs.

Pi-top did not provide comment on jobs at risk of redundancy, but told us that it has hired three new staff "to accelerate the SaaS side of our education offering and will be increasing our numbers in the U.S. to service our growth in the region."

We understand that the latest round of cuts have been communicated to staff as a cost-reduction exercise and also linked to implementing a new strategy. Staff have also been told that the business focus has shifted to the U.S schools market.

As we reported earlier this year, pi-top appointed a new executive chairman of its board who has a strong U.S. focus: Stanley Buchesky served in the Trump administration as an interim CFO for the U.S. Department of Education under Secretary of Education Betsy DeVos. He is also the founder of a U.S. ed tech seed fund.

Sources familiar with pi-top say the company is seeking to pivot away from making proprietary ed tech hardware to focus on a SaaS learning platform for teaching STEM, called pi-top Further.

At the start of this year it crowdfunded a fourth-gen STEM device, the pi-top 4, with an estimated shipping date of this month. The crowdfunder attracted 521 backers, pledging close to $200,000 to fund the project.

In the pi-top 4 Kickstarter pitch the device is slated as being supported by a software platform called Further -- which is described as a "free social making platform" that "teaches you how to use all the pi-top components through completing challenges and contributing projects to the community," as well as offering social sharing features.

The plan now is for pi-top to monetize that software platform by charging subscription fees for elements of the service -- with the ultimate goal of SaaS revenues making up the bulk of its business as hardware sales are de-emphasized. (Hardware is hard; and pi-top's current STEM learning flagship has faced some challenges with reliability, as we reported in August.)

We understand that the strategic change to Further -- from free to a subscription service -- was communicated to staff internally in September.

Asked about progress on the pi-top 4, the company told us the device began shipping to backers this week. 

"We are pleased to announce the release of pi-top 4 and pi-top Further, our new learning and robotics coding platform," it said. "This new product suite provides educators the ability to teach coding, robotics and AI with step-by-step curriculum and an integrated coding window that powers the projects students build. With pi-top, teachers can effectively use Project Based Learning and students can learn by doing and apply what they learn to the real world."

Last month pi-top announced it had taken in $4 million in additional investment to fund the planned pivot to SaaS -- and "bridge towards profitability," as it put it today.

"The changes you see are a fast growing start-up shifting from revenue focus to a right-sized profit generating company," it also told us.