Edtech unicorn Vedantu Innovation Pvt Ltd has widened its losses as the revenues jumped by 80%. The company’s losses increased to Rs 696.3 crore in the last financial year (FY22), about 13% higher as compared to Rs 616.3 crore losses reported in the previous fiscal.
However, the Tiger Global-backed firm's revenues grew 80% to Rs 168.9 crore on a consolidated basis in the twelve-months ended 31 March 2022, according to the latest available financials it filed with the Registrar of Companies (RoC).
Vedantu, valued at over $1 billion, offers online education and live interacting classes to its customers. It is also backed by investors such as Singapore’s ABC World Asia, Legend Capital, Omidyar Network GGV Capital, WestBridge Capital, Accel and TAL Education, among others.
While the company controlled its losses in FY22 despite growing its revenue 1.8X on a yearly basis, the company has since undertaken three rounds of layoffs citing a tough macro-environment in the first 10 months of FY23. More than 1,100 employees in Vedantu have already been impacted.
The edtech is one of the many startups in the sector, which are under pressure to improve margin and conserve cash, as it adjusts to hybrid models.
In FY22, Vedantu’s total expenses grew about 19% to Rs 890.9 crore, owing to rise in employee benefit and other expenses, which include advertising and promotional costs.
Employee-benefit expense, which accounts for more than half of the company’s total costs, grew 20% to Rs 489.3 crore.
Next big contributors were advertising and promotional expenses, which grew about 3% to Rs 181.9 crore. It incurred about Rs 89.7 crore in miscellaneous expenses during the year, more than 4X of Rs 20.6 crore in FY21.
Founded in 2011 by Vamsi Krishna, Anand Prakash and Pulkit Jain, Vedantu became a unicorn after raising $100 million (Rs 740 crore) in its Series E round led by Singapore-based impact investor ABC World Asia in September 2021. Last year, in October, the company acquired a majority stake in the test preparation platform for $40 million in October.
Compared to its peers in the sector, the company lags behind in terms of scale. In FY22, Unacademy reported an 80% jump in revenue to Rs 719 crore. The Temasek-backed Upgrad’s operating revenues nearly doubled to Rs 679.1 crore during the same period. Byju’s hasn’t reported its financials for FY22. In terms of profitability, so far, PhysicsWallah is India's sole profitable edtech unicorn, reporting an operating revenue nine-fold jump to Rs 232.48 crore in FY22.