Unacademy’s revenue and losses surge over 80% in FY22

• ByStartupStory     |    October 27, 2022

Unacademy is no exception to the fact that edtech companies have had a difficult current fiscal year. The SoftBank-backed company announced its entry into offline learning in FY23 after laying off staff, reducing expenses, and leaving the K-12 market. Unacademy has managed to surpass the Rs 700 crore milestone in FY22, albeit the effects of these activities and exercises won’t be known until the end of the current fiscal year.

According to the company’s annual financial records filed with the Registrar of Companies, Unacademy’s operating revenue increased by 80.7% to Rs 719 crore during the financial year ended March 2022 from Rs 398 crore recorded in FY21 (RoC).

The Bengaluru-based business mostly makes money from student course subscription fees. From Rs 390 crore in the previous fiscal year to Rs 705.5 crore in FY22, revenue from this sector increased by 81%. During FY22, it earned an additional Rs 13.7 crore from the sale of educational supplies. During FY22, Unacademy earned a total of Rs 844 crore in revenue, including Rs 125 crore in non-operating income, primarily from interest on fixed deposits, gains from mutual funds, and other financial investments.

Unacademy, which claims to have over 1,000 educators on its digital learning platform, offers courses for competitive exams such as NEET UG, IIT JEE, GATE, and UPSC CSE, for those who are unaware. The platform previously offered K–12 online courses, but it reportedly shut down that vertical in March of this year to concentrate on exam preparation.

Employee benefits emerged as the highest cost centre in terms of expenditures, accounting for over 48% of the total. In FY22, this expense increased 136.8% to Rs 1,771 crore, which included Rs 1,140 crore in ESOP costs that were paid in cash and equity. About 31% of their overall expenses were for ESOPs.Unacademy announced an ESOP buyback for $10.5 million in September of last year, and its ESOP pool is currently valued at almost $400 million.

In FY22, payments to educators came in at number two in terms of cost centres, making up 22% of all spending. In FY22, this cost rose by 50.5% to Rs 814 crore, whereas over the same period, advertising and promotional costs rose by 33.6% to Rs 549 crore. The company states that it has a lifetime educator base of 91,000 people.

Additionally, Unacademy spent a total of Rs 319 crore on IT (including payment gateway expenses), legal, and professional services.

Unacademy’s overall costs increased by 82.4% to Rs 3,703 crore in FY22 from Rs 2,030 crore in FY21 due to an increase in employee benefits and marketing costs. Additionally, during the year, its operating cash outflows increased 68.3% to Rs 1,452 crore. Unacademy’s losses increased by over 85% to Rs 2,848 crore in FY22 from Rs 1,537 crore in FY21, in accordance with the company’s sales.

In terms of ratios, during the fiscal year ending March 2022, Unacademy’s EBITDA margin and ROCE declined by 389 and 100 BPS, respectively, to -324.46% and -81.38%. The edtech unicorn cost Rs. 5.15 to make 1 rupee of operating revenue.

The corporation has implemented many cost-cutting initiatives for the current fiscal year (FY23), including ending its IPL sponsorship as of the following year. According to Unacademy’s chief executive, Gaurav Munjal, the business has Rs 2,800 crore in its bank account and is on schedule to launch its initial public offering (IPO) by 2024.

Unacademy, in contrast to some of the other edtech competitors, appears to have chosen and put a lot of effort into the test prep sector. It will eventually accumulate enough success stories and “testimonials” to give it the runway it needs to pursue expansion for a very long time.Millions of job applicants will be eager to spend time and money to increase their chances of selection as there will be a huge push throughout India to fill open positions in the government sector. It will be interesting to watch how the corporation assesses these chances because that could provide it a significant advantage.

Byju’s, a competitor of Unacademy, recently released its FY21 statistics, showing operating revenue of Rs 2,280 crore and a loss of Rs 4,564 crore. Although its FY22 data have not yet been submitted, the company had hoped to reach an income of Rs 10,000 crore in the previous fiscal year.

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