Unacademy narrows losses by two-thirds, but sees revenue decline in FY24
The drop in revenue comes as Unacademy focuses more on the offline front in a bid to boost income, while its revenue from the online test preparation segment—its core business—experiences a downturn.
Edtech unicorn Unacademy narrowed its losses by nearly two-thirds, but what’s concerning is the decline in operating revenue in FY 2023-24 compared to the previous year.
The Bengaluru-based firm reported a consolidated loss of Rs 630.9 crore in FY24, a fall of 62.4% from Rs 1,678.1 crore recorded in the earlier fiscal period. Meanwhile, its operating revenue fell 7.4% year-on-year (YoY) to Rs 839.8 crore in FY24, according to its recent consolidated financial statements sourced from Tofler.
The startup’s total income, including interest income from current investments reached Rs 988.5 crore in the financial year that ended this March—down 5.4% YoY.
The drop in revenue comes as the edtech company shifts focus to the offline front in a bid to boost income, while its revenue from the online test preparation segment—its core business—experiences a downturn.
A week ago, Co-founder and CEO Gaurav Munjal said in a LinkedIn post that the ongoing year, or FY25, will be “Unacademy’s best” in terms of growth in the offline business and overall unit economics.
He noted that while Unacademy’s offline centres business grew by 30%, the online test prep business experienced a degrowth, with both channels showing significant improvement in unit economics.
Meanwhile, the company is focused on reducing expenses, which helped it narrow its losses in FY24. Overall, the firm’s expenditure dropped by 40.5% YoY to Rs 1,627 crore in the last fiscal year.
This was driven by a sharp decline in employee benefits, which dropped to Rs 539.2 crore in FY24, a 57.9% YoY decrease. Despite the reduction, it remains the largest expense category.
The decrease in employee benefit expenses reflects layoffs and a wave of senior-level departures. The firm's total managerial remuneration, including directors’ salaries, fell by 85.2% YoY to Rs 21.4 crore in FY24. Additionally, its total employee share-based payments dropped by 71.1% YoY to Rs 183 crore.
Employee share-based payments are typically granted to executives, senior management, key employees, and sometimes broader staff to incentivise performance and promote retention.
In June, Unacademy Co-founder Hemesh Singh stepped down as chief technology officer to take on an advisory role. Last month, it experienced another top-level exit, with Hardik Pandya, senior vice president of design and product, announcing his departure after a four-year tenure with the Bengaluru-based firm.
Meanwhile, the firm also managed to reduce its other expenses, such as advertising promotional expenses, by 34% YoY to Rs 244.3 crore in FY24.
According to the Unacademy chief, the company’s group-level cash burn has decreased by 50%, and it now holds cash reserves of $170 million, with no debt and a runway of over four years.
“We are building Unacademy for the long run. We are not doing any Sale or M&A. Ignore the Rumours,” his week-old post noted. Reports have highlighted potential M&As with offline coaching institute ALLEN and school education and technology services provider K12 Techno Services.
Meanwhile, Munjal has expressed his enthusiasm on social media about Unacademy’s new offering—a language learning app called Airlearn.
His LinkedIn post said Airlearn has crossed almost $400,000 ARR in the US within a few months of launch. The language learning app adds another revenue stream for the edtech firm
The majority of the users on the app are from the US, with Spanish and French being the most popular languages, he had shared earlier in a post on social media platform X.
Airlearn (formerly Unacademy Languages), launched in India in June, is positioned to compete with other global language learning apps like Duolingo and Babbel.
Edited by Jyoti Narayan