Business News

Classplus Revenue Doubles to ₹260 Crore in FY24, Cuts Losses by 57%

In a remarkable financial turnaround, edtech startup Classplus has reported a twofold increase in its revenue, reaching ₹260 crore in FY24. This significant growth comes alongside a substantial reduction in losses by 57%, showcasing the company’s effective cost management and strategic investments. Classplus, which empowers educators to launch their online coaching businesses, has demonstrated resilience and adaptability in a challenging market, setting a new benchmark for the edtech industry.

Strategic Growth and Revenue Surge

Classplus has achieved impressive financial growth, doubling its revenue from ₹102 crore in FY23 to ₹260 crore in FY24. This surge is attributed to the company’s focus on providing SaaS tools and software, which accounted for 96.6% of its total operating revenue. The sale of these tools reached ₹205.5 crore, while product sales and related services contributed ₹8 crore. Additionally, Classplus earned ₹52 crore from interest on fixed deposits, bringing its total income to ₹264 crore.

The company’s strategic investments have also played a crucial role in its growth. Classplus has invested in GyanLive, a government job-preparation portal, and launched the Polaris School of Technology, offering a four-year computer science program in Bengaluru. These initiatives have not only diversified its revenue streams but also strengthened its market position.

classplus revenue growth and loss reduction

Effective Cost Management

Classplus’s ability to manage costs effectively has been a key factor in its financial success. The company reduced its total expenses by 7.3%, lowering overall expenditure from ₹405.2 crore in FY23 to ₹375.7 crore in FY24. This reduction was driven by a 12% decrease in employee benefits, which accounted for 54% of total expenses, and a 7.3% cut in advertising and promotional costs.

Employee benefits for FY24 totaled ₹201.7 crore, including ₹38.5 crore in non-cash ESOP costs. Other expenses, such as legal and professional fees, information technology, and depreciation, were also managed efficiently. These cost-cutting measures have significantly contributed to the reduction in net losses, which fell to ₹110.4 crore in FY24 from ₹256 crore the previous year.

Path to Profitability

Classplus is on a promising path to profitability, with its Return on Capital Employed (ROCE) and EBITDA margin showing marked improvements. The company’s ROCE improved to -15.26%, and its EBITDA margin rose to -35.99%. On a per-unit basis, Classplus spent ₹1.77 to earn a rupee in FY24, reflecting its enhanced operational efficiency.

The company’s financial health is further bolstered by its successful fundraising efforts. Classplus has raised over $160 million to date, including a $70 million Series D round in March 2022, which valued the company at $600 million. Notable investors include Tiger Global, Alpha Wave, RTP Global, Blume Ventures, and GSV Ventures. These investments have provided the necessary capital to fuel Classplus’s growth and innovation.

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