Higher education and upskilling platform Eruditus has become India’s second-largest revenue-grossing edtech startup after the SoftBank-backed company generated close to $250 million from operations in FY22 (2021-22).
Eruditus, which follows a July-June financial year as it is incorporated in Singapore, earned operating revenue of $245.25 million (or about Rs 1,850 crore) for the year ended June 2022, a jump of 86 percent from its previous year’s operating revenue of $131.19 million (or about Rs 988.8 crore). With this, the SoftBank-backed unicorn only trails Byju’s, which is yet to file its FY22 (Apr-Mar) results, but had a revenue of close to Rs 2,500 crore in FY21 (Apr-Mar).
Interestingly, Eruditus’ operating revenue is also more than that of the other four direct-to-consumer edtech unicorns that have filed FY22 results together. Ronnie Screwvala’s upGrad, SoftBank-backed Unacademy, Tiger Global-backed Vedantu and India’s newest unicorn PhysicsWallah have a cumulative revenue of Rs 1,800 crore.
However, Eruditus also became India’s biggest loss-making edtech unicorn for FY22 with a loss of $386.8 million or about Rs 2,915 crore. To be sure, Byju’s is yet to file its FY22 results and had a loss of more than Rs 4,500 in FY21.
News agency Entrackr first reported the development.
During the period, Eruditus’ expenses surged close to 60 percent to $630 million (or Rs 4,748 crore), thanks to an over 100 percent increase in its marketing spends. Eruditus spent $141.6 million (Rs 1,060 crore) on marketing and promotions. The company also had an impairment of goodwill charge of $115.8 million, which weighed on its bottomline.
In a recent interview with Moneycontrol, Eruditus’ founders Ashwin Damera and Chaitanya Kalipatnapu, had said that the company expects to clock revenue of about $430 million in 2022-23, which will imply an over 70 percent rise from its FY22 revenue, a brave prediction at a time when most edtech companies are expecting slower growth in demand for services.
Damera and Kalipatnapu also told Moneycontrol that the company will turn profitable in FY24 (July-June 2023-24) on a bookings basis as it is witnessing strong growth in its revenue with working professionals increasingly opting for upskilling amid fears of recession.
Edtech companies like Eruditus (now known as Emeritus), calculate revenue, typically in two ways--accrued and bookings. Bookings revenue or collection revenue is the total sales generated by the company during a fiscal year that also includes deferred revenue. Accrued revenue, on the other hand, excludes deferred revenue. Deferred revenue is the advance fees collected for services that will be delivered over a period of time.
Founded in 2010 by Kalipatnapu and Damera, Eruditus (Emeritus) is a platform that provides executive-level programmes for working professionals. The company has raised a little more than $814 million in equity funding to date and counts SoftBank, Prosus, Sequoia, Chan Zuckerberg Initiative, GSV Ventures among others as its backers. In August 2021, the company raised its largest-ever round of $650 million at a valuation of more than $3.2 billion.
The majority of Eruditus' revenue comes from outside India as the country contributes to just about a fifth to its total revenues, the founders had told Moneycontrol. But the company is seeing India becoming its fastest-growing market over the next 24 months.
“In India over the next 24 months, I see a 4x growth. I say that because of the tailwinds and the demand in terms of the number of students who want to enroll. It is certainly the fastest-growing market for us within the company,” Mohan Kannegal, CEO (chief executive officer) of India and APAC (Asia Pacific) Consumer business told Moneycontrol recently.