Revenue from operations grew to INR 61.5 Cr in FY22, up 1.6X from INR 36.5 Cr reported in FY21
Adda247’s total expenses surged more than fourfold to INR 221.4 Cr in FY22, up from INR 52.2 Cr in FY21
The edtech startup is said to have spent INR 9.4 Cr towards legal expenses and INR 7.9 Cr on promotion and marketing
Edtech startup Adda247 saw its losses widen more than 10X year-on-year (YoY) to INR 157.8 Cr in the financial year 2021-22 (FY22). In contrast, the startup had reported a loss of only INR 15.18 Cr in the year-ago period.
Amid the soaring losses, revenue from operations also grew to INR 61.5 Cr in FY22, up 1.6X from INR 36.5 Cr reported in FY21. Counting the platform’s other income, total revenue stood at INR 64 Cr in the year ended March 2022, up from INR 37 Cr reported during the previous fiscal year.
The platform largely earned revenue from contracts with customers and by offering online courses and test prep series. It also accrued revenue from the sale of books, ebooks and other preparation material to users.
The raging losses were likely the result of mounting expenses, which ate a big chunk of the company’s bottom line. Adda247’s total expenses surged more than fourfold to INR 221.4 Cr in FY22, up from INR 52.2 Cr in FY21.
Of these expenses, finance costs accounted for a major chunk at INR 129.6 Cr in FY22 against INR 5.4 Cr reported in FY21. Similarly, employee benefit expenses also rose 1.7X YoY to INR 29.8 Cr in the year ended March 2022
The company also spent INR 9.4 Cr towards legal expenses and INR 7.9 Cr on promotion and marketing
Founded in 2016 by Anil Nagar and Saurabh Bansal, Adda247 offers online coaching for competitive exams. The edtech platform also offers video courses and mock tests for more than 500 competitive exams in 12 Indian languages.
Adda248 is backed by marquee names such as WestBridge Capital and JM Financial. With 1,000 teachers on its rolls, the startup claims to have more than 2 Mn paid users on its platform
Curiously, the startup raised $35 Mn in funding from investors late last year and, close on the heels of that, said that the platform had granted stock options to the tune of INR 150 Cr for its employees under its Employee Stock Ownership Plan (ESOP
The growing losses of Adda247 are not an aberration. Across the edtech sector, startups have been saddled with mounting losses, with no clear path to profitability. Besides, the online edtech space has also seen the impact of students returning to physical classes, taking away the allure of online learning.
The edtech industry has also borne the brunt of mass layoffs as it accounted for the biggest chunk of layoffs last year. In 2022, Indian edtech companies fired more than 7,800 employees while as many as five edtech startups shut shop.
However, the edtech space continues to be poised for big growth led by giants such as BYJU’S, Unacademy and Vedantu. According to an Inc42 report, the homegrown edtech space is projected to grow to a market size of $10.4 Bn by 2025.
