Edtech Soonicorn BrightCHAMPS Spent INR 5.4 To Earn Every INR 1 From Operations In FY22

Goa-based edtech soonicorn BrightCHAMPS reported a 28X year-on-year (YoY) rise in its standalone loss to INR 98.7 Cr in the financial year 2021-22 (FY22) on the back of a sharp rise in expenses.

The startup had reported a net loss of INR 3.5 Cr in FY21. However, the financial statements for FY21 only reflected the number for about a nine-month period from July 07, 2020 to March 31, 2021 as FY22 was the first full year of operations for the edtech startup, founded in July 2020 by Ravi Bhushan.  

Its operating revenue also jumped 11.3X to INR 22.5 Cr in FY22 from INR 2 Cr in the previous reporting period.

As an edtech platform which offers certificate courses for coding, financial literacy, creative thinking, among others, to kids in the 6-16 years of age group, BrightCHAMPS earns a majority of its revenue from sale of services.

Besides India, the startup has presence in countries such as Bangladesh, Indonesia, Singapore, and the US. In FY22, BrightCHAMPS earned INR 5 Cr from Indonesia alone. 

As per the filing, its operating revenue from the rest of the world (excluding the countries mentioned above), stood at INR 12.9 Cr in the year.

India contributed only INR 46.5 Lakh to its total operating revenue in FY22, up from INR 9.4 Lakh in the previous year.

After the article was published, BrightCHAMPS reached out to Inc42 with the following statement: “The global nature of our business necessitated the establishment of local companies in 5 key markets, early in our journey. The revenue collected within these international entities exceeds the revenue within the India entity by significantly more than 100%, over and above the revenue disclosed within the regulatory filings in India. Therefore, the 5:1 ratio for expenditure to revenue is not representative of BrightCHAMPS’s total global revenue.”

However, the company declined to elaborate on the financials of these five overseas subsidiaries. Inc42 could not independently verify the revenue for each of these markets.

On the expenses front, BrightCHAMPS spent a total of INR 121.1 Cr in FY22, almost a 21X jump from INR 5.8 Cr spent in the previous reporting year.

 

In fact, its total expenses were almost 5X of the total revenue reported in FY22, with employee benefit expenses accounting for the biggest chunk of the expenditure.

BrightCHAMPS spent INR 55.5 Cr in FY22 towards employee benefits, which was a 37X jump from INR 1.5 Cr spent in the previous year.

The increase was in line with the startup’s announcement during its last funding round in November 2021. After raising $63 Mn in the round, led by Premji Invest, GSV Ventures, 021 Capital, Beenext, and Binny Bansal, at a valuation of $500 Mn, BrightCHAMPS had said it would further expand its team across product, growth, technology, content, sales, operations, marketing, and business development.

In fact, the startup’s advertising and marketing expenses also surged over 20X to INR 42.4 Cr in FY22 from INR 2.1 Cr in the previous year’s reporting period.

Meanwhile, it spent around INR 16.8 Cr on legal professional charges in FY22, which increased from INR 13.9 Lakh in the previous year.

Overall, the startup spent INR 5.4 to earn every INR 1 in operating revenue in FY22.

It is pertinent to note that despite the huge jump in loss and expenses, BrightCHAMPS made its first acquisition in FY22. In February last year, it acquired edtech startup Education10x in a cash and stock deal.

Later, in August 2022, it acquired another Singapore-based edtech platform Schola in a $15 Mn cash and stock deal.

The country’s edtech sector is currently going through a crisis, with the ongoing funding winter and the sectoral downturn adding to the woes of the startups struggling with mounting losses. While Eruditus reported a 46% YoY rise in consolidated net loss to $386.8 Mn in FY22, Unacademy’s loss widened 85% YoY to INR 2,848 Cr. Another unicorn, Vedantu, reported widening of its loss to INR 696.2 Cr in the year from INR 616.2 Cr in FY21.

While BYJU’S is yet to file its financial statements for FY22, its FY21 loss zoomed almost 20X to INR 4,588 Cr.

Amidst all these, Indian edtech startups have laid off almost 9,000 employees since last year to cut costs.