upGrad Reports INR 1,141.5 Crore Net Loss in FY23 Despite Crossing INR 1,000 Crore Operating Revenue Milestone

• ByStartupStory     |    December 14, 2023

Mumbai-based edtech unicorn upGrad faced a notable setback as its net loss surged by 76%, reaching INR 1,141.5 Crore in the financial year 2022-23 (FY23), compared to INR 648.2 Crore in the previous fiscal year. The edtech giant attributed this substantial loss to a goodwill writedown of INR 410 Crore, despite achieving a significant milestone with operating revenue crossing the INR 1,000 Crore mark for the first time in its history.

upGrad reported operating revenue of INR 1,169.6 Crore in FY23, marking an impressive 97% increase from INR 595 Crore in the preceding fiscal year. Established in 2015 by Ronnie Screwvala, Mayank Kumar, and Phalgun Kompalli, upGrad specializes in offering higher education courses and skilling programs through collaborations with various colleges and universities, generating revenue primarily from program fees and commissions earned from partner institutions.

The company’s aggressive acquisition strategy in 2022 took its toll, resulting in an impairment of goodwill worth INR 410 Crore on these acquisitions during the year. upGrad acquired six startups – Harappa Education, INSOFE, Centum Learning, Exampur Marking, WOLVES India, and Work Better. However, challenges arose as upGrad closed several verticals of the acquired businesses in FY23, leading to the impairment of goodwill.

Notable impairments include INR 112.7 Crore for discontinuing programs offered by INSOFE and refunding fees due to a challenging hiring market and external economic factors. Additionally, upGrad recognized an impairment loss of INR 125.5 Crore due to a reduction in the number of university programs from the acquisition of Aarina Educational Services Pvt Ltd (TalentEdge).

The startup’s adjusted EBITDA loss stood at INR 558 Crore in FY23, compared to INR 572 Crore in the previous year. Total expenses for upGrad increased by 56%, reaching INR 1,938 Crore from INR 1,241 Crore in the previous fiscal year.

Key expense breakdowns include an 80% increase in Employee Benefit Expenses to INR 707 Crore, a reduction in Advertising Expenses by 8% to INR 371.4 Crore, and a 70% jump in University Fees to INR 132.7 Crore.

Despite these financial challenges, upGrad announced its entry into the Pacific region with the establishment of the upGrad Institute of Medical Sciences in the Republic of Vanuatu.

upGrad, a unicorn since August 2021 with a valuation of $1.2 billion, has raised over $600 million to date and boasts investors such as Temasek, International Finance Corporation, and IIFL. The company’s valuation surged to $2.2 billion in June 2022 after a funding round led by ETS Global.

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