EdTech startups are one of the few industries benefiting from Covid-19 lockdown. Byju’s, Unacademy, Toppr, Vedantu are a few of those companies having 3X more engagement since the first phase of lockdown. Naturally seeing the increased userbase, the companies are expected to grow in profits as well.

Byju’s had already turned profitable in Financial Year 2019 while Unacademy and Veduantu saw an increase in both income and losses in March 2019. Toppr recorded 2.5X surge in its revenue in fiscal year 2019 of Rs 56.4 crore from Rs 23 crore in FY18. This jump in revenue came from subscription income from cities outside the top 10 bracket.

Toppr had doubled its bet on pushing sales post it raised $35 million through Series C round in 2018 December from a group of investors. The investment helped Toppr to come out of the liquidity crunch it was facing in financial year 2018 with negative equity on its balance sheet due to erosion of capital. Even though the company raised money, its expenses grew immensely by 81% in FY19.

Employee benefits make up to about 52% of the expenditure for the company as it employed more educators and operational staff. These expenses grew by 75% from Rs 45.8 crore in FY18 to Rs 80 crore in FY19. The marketing expenditure too shot up by 2.5X from Rs 8 crore in fiscal year 2018 to Rs 22.2 crore in FY19.

At the end of FY19, Toppr’s balance sheet also presents outstanding debentures worth Rs 37 crore carrying interest rates as high as 14.5%, which explains the finance costs of Rs 7.2 crore incurred by the company during the fiscal ended in March 2019. Even though the company spent extravagantly, it also saw an increase in its user base and revenue.

Byju’s seems to be doing better than others in the field. Vedantu incurred 3X more losses than its revenue in FY19 while Unacademy lost Rs 112 crore for an income of Rs 12 crore.

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