Eruditus becomes second-largest revenue-grossing edtech firm
Most other edtech unicorns have posted losses in FY22, including Unacademy, upGrad and Vedantu. BYJU'S is yet to file its FY22 numbers but reported Rs 4,588 crore loss in FY21.
Eruditus’ operating revenue increased 87% to $245.2 million (~Rs 1,860 crore) in FY22 from $131.2 million (~Rs 988 crore) in the previous fiscal, making it the second-largest revenue-grossing edtech firm, according to a report.
Eruditus’ FY22 revenue was higher than that of edtech unicorns like , (PW), , and , but lower than that of (FY21 for BYJU'S), Entrackr reported.
However, also posted higher net losses—$348.95 million (Rs 2,645 crore) in FY22, up 32.1% from $264.2 million (~Rs 2,174 crore) in the previous year. The company follows a July-June financial year.
This loss included $241 million of non-cash exceptional items such as $92 million of goodwill impairment and $149 million of ESOP provisions and excluded $77 million of revenue collected but not recognised in the fiscal. Adjusting for these, Emeritus's FY22 loss was $66 million.
The SoftBank-backed firm’s overall expenditure went up by 49.5% to $594.2 million (~Rs 4,504 crore) in FY22 from $397.4 million (~Rs 3,270 crore) in FY21.
The edtech company spent $262.1 million (~Rs 2,157 crore) in FY22 on employee benefits—its largest expense, accounting for 44.1% of the overall cost. Its advertising and marketing expenses were $141.61 million (~Rs 1,166 crore) in the fiscal as against $67.09 million (~Rs 552 crore) in the year-ago period.
Founded by Ashwin Damera and Chaitanya Kalipatnapu in 2010, Eruditus offers executive-level courses from top universities. It has collaborated with universities across the US, Europe, Latin America, Southeast Asia, India, and China.
Eruditus has raised a total funding of $814 million over seven rounds, as per Tracxn. It raised its largest round of $650 million in August 2021. Last March, it also received $350 million in debt financing from CPP Investments. Eruditus was last valued at $3.2 billion in August 2021.
The edtech sector has been in turmoil after a period of intensive pandemic-driven boom. The pandemic offered tailwinds for tremendous growth, but the resumption of offline classes, combined with a funding winter, have hit the edtech firms hard.
Much like Eruditus, most of the other edtech unicorns have posted losses in FY22—Tiger Global-backed Unacademy reported a loss of Rs 2,848 crore while upGrad witnessed a loss of Rs 627 crore and Vedantu posted a loss of Rs 696 crore. BYJU'S, which is yet to file its FY22 numbers, reported Rs 4,588 crore loss in FY21.
PW was the only profitable firm among edtech unicorns. Its net profit for the financial year 2021-22 was Rs 97.8 crore—up 14-fold from Rs 6.93 crore in the year-ago period.
During a panel discussion at TechSparks Mumbai 2023, Damera emphasised that edtech startups, including Eruditus, are imbibing the principles of profitability and sustainable growth metrics while also focusing on creating impact.
“It’s a phase where we are optimistic about what we are building. It's (edtech) not just business but also an impact," he said. "As long as founders understand that edtech is both a public and private good, both a business and a mission, and if they can stay true to that, then (the) future is bright.”
(This story was updated with additional details on the company's financials.)
Edited by Saheli Sen Gupta
