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Ronnie Screwvala-led edtech firm upGrad Education Pvt Ltd’s net loss widened nearly threefold in 2020-21 (FY21) as the company doubled its advertising and promotional expenses during the year.
The company reported a consolidated net loss of ₹211 crore for FY21, against a net loss of ₹78 crore for 2019-20 (FY20), the company’s filings with the Ministry of Corporate Affairs (MCA) show. The company spent ₹205 crore on advertising and promotion in FY21, against a total spend of ₹95 crore a year earlier. The company’s employee benefit costs also doubled to ₹161crore from ₹89 crore a year earlier.
On a standalone basis, the company reported a net loss of ₹202 crore for the year under review against a loss of ₹78.89 crore in FY20.
upGrad’s consolidated revenue nearly doubled at ₹302.26 crore in FY21 owing to the pandemic-induced restrictions on movements of people, which led to a surge in demand for online education. A year ago, the edtech firm's consolidated revenues stood at ₹162.57 crore.
The shift to online tutoring is helping edtech companies like upGrad, and thus, many firms are expecting a strong growth in revenue for 2021-22 (FY22) as well. In a recent interview, Mayank Kumar, Co-founder and Managing Director of upGrad, told VCCircle that the company is on track to double its revenue for FY22. SoftBank-backed edtech unicorn Eruditus is also expecting its revenue to double in FY22.
Edtech companies are aggressively taking the inorganic route to either expand their product offerings or to reach newer geographies, which is further helping them grow their revenue.
During FY21, upGrad acquired Transforming Higher Education GATE Academy Pvt Ltd and Rekrut India Pvt Ltd. upGrad has investments of ₹4.03 crore in Optionally Convertible Debentures of Transforming Higher Education GATE Academy and has also extended loans amounting to ₹65 lakh to the company as on 31 March 31 2021, the company said in the regulatory filings. Last month, it had announced acquisition of online higher education business Talentedge Education Ventures Pvt Ltd.
In the current financial year, the company has already acquired as many as five companies. In July, the company had said that it is earmarking $250 million for mergers and acquisitions.
upGrad also recently announced merger of its three subsidiaries – upGrad Campus (formerly Impartus), upGrad Jeet (formerly The GATE Academy) and upGrad KnowledgeHut (formerly KnowledgeHut) -- into one single parent unit in a bid to execute an integrated strategy.
The company, which joined the coveted unicorn club in August last year after raising $185 million from International Finance Corp, IIFL Group and Temasek, earlier this month appointed Eruditus Education’s Director of Inside Sales Vikram Vyas as its Vice President-Growth, International Sales.
