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Eruditus scales up revenue and cuts down losses in FY23

Eruditus, a leading executive education and upskilling platform, has reported impressive growth in its revenue and profitability in the fiscal year 2023. The SoftBank-backed edtech unicorn has crossed Rs 3,300 crore in revenue and reduced its losses by 66% in the last financial year.

Revenue growth driven by global expansion and partnerships

Eruditus offers online and classroom management education programs in collaboration with top business schools such as Harvard, MIT, Columbia, and INSEAD. It also provides corporate training and upskilling courses through its subsidiary Emeritus, which claims to have educated over 2,50,000 individuals across 80 countries.

According to its consolidated financial statements filed by the group entity in Singapore, Eruditus’ revenue from operations spiked 70.39% to Rs 3,343 crore in FY23 from Rs 1,962 crore in FY22. The sale of these services was the sole source of revenue for Eruditus.

The United States was the largest geographical market in terms of revenues, accounting for around 44% of its annual revenues followed by Asia and Asia Pacific countries. Latin America and Europe contributed 16% and 11% to the total collections in FY23.

Eruditus has also expanded its global presence by acquiring iD Tech, a US-based STEM education provider for children, and launching new programs in emerging markets such as Africa and the Middle East.

Eruditus scales up revenue and cuts down losses in FY23

Cost optimization and operational efficiency boost profitability

Eruditus has also improved its bottom line by optimizing its cost structure and enhancing its operational efficiency. The program fee paid to schools, which was the largest cost center for Eruditus, increased by 56.8% to Rs 1,356 crore in FY23, but at a lower rate than the revenue growth.

Eruditus also managed to cut down its employee benefits and marketing costs by 53.1% and 12.7% respectively. Its information technology, legal professional, and other overheads took the firm’s total expenditure to Rs 4,392 crore in FY23 as compared to Rs 5,056 crore in FY22.

As a result, Eruditus’ effective cost mechanism helped it to reduce losses by 66.1% to Rs 1,049 crore in FY23 from Rs 3094 crore in FY22. Its ROCE and EBITDA margin stood at 25.6% and 15.2% respectively. The company has total outstanding losses of Rs 7,142 crore till June 2023. On a unit level, it spent Rs 1.31 to earn a rupee in FY23.

Future plans and competitive landscape

Eruditus is one of the most valued edtech startups in India, having raised $650 million in a Series E round led by SoftBank Vision Fund 2 in August 2023, at a valuation of $3.2 billion. The company is also planning to foray into the study abroad category, which will put it in direct competition with players like upGrad, Leverage Edu, Leap Scholar, CollegeDekho, and AdmitKard.

Eruditus is also reportedly mulling to reverse flip to India ahead of its IPO plans, which could make it the first Indian edtech startup to go public. The company is aiming to achieve a valuation of $5 billion in the next 18 months.

Eruditus is the second-largest revenue-generating edtech company in India, after Byju’s, which is yet to report its FY23 numbers. Other notable players in the edtech space include upGrad, Unacademy, Great Learning, PhysicsWallah, and Simplilearn.

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