Unacademy nears profitability at group level; revenue rises 26%

Edtech major Unacademy claims it is on track to achieve group-level profitability this year as the company has been able to boost its group-level revenue by 26% for the calendar year (CY) 2023, according to an internal message from Co-founder and CEO Gaurav Munjal.

For the ongoing CY23, the company has registered a revenue of Rs 1,250 crore at the group level from Rs 992 crore in the year prior, as per screenshots of the message seen by YourStory.

The edtech unicorn has conducted multiple rounds of layoffs and resorted to other cost-cutting measures to increase the profitability of its business. It has witnessed a significant jump in revenue through sharp growth in its offline business. However, the revenue from the online test preparation segment, which is its core business, has dropped.

Unacademy’s revenue from (offline) centres has grown to Rs 400 crore in CY23—up 655% from Rs 53 crore in CY22, according to Munjal. Its online test preparation revenue dropped 15% to Rs 620 crore in CY23 from Rs 732 crore in the year-ago period, as per Unacademy’s chief.

Then comes PrepLadder, the postgraduate entrance exam preparation platform which it acquired in 2020 for $50 million. Its revenue went up 9% to Rs 200 crore in CY22. Unacademy’s Graphy, a platform for content creators, has witnessed revenue growth of 68% to Rs 30 crore.

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According to Munjal, the company’s cash balance as of March 2023 was more than Rs 2,100 crore and it will achieve its first-ever month of group-level EBITDA profitability in April 2023. EBITDA, or earnings before interest, taxes, depreciation and amortisation, is a measure of core operational efficiency.

With a cash balance of Rs 1,977 crore from December 2023 (average monthly burn of Rs 17 crore between April 2023 to December 2023), the edtech major will have about 116 months of runway, as per Unacademy’s chief.

Unacademy clocked a loss of Rs 2,848 crore for FY 2022. The unicorn’s losses widened by 85% since the previous fiscal year when it reported a loss of Rs 1,537.4 crore. BYJU'S, which is yet to file its FY22 numbers, reported Rs 4,588 crore loss in FY21. Physics Wallah was the only profitable firm among edtech unicorns with a 14-fold jump in profits in FY22.

“There is some chatter on the floors about Unacademy not doing well. Let me correct that. This will be the best year for Unacademy since we started the company in 2015,” Munjal noted in the message. “I have said this before, I will say it again. We will be the largest edtech company soon. We will be the last ones standing. A few rough patches here or there won’t stop us.”