How Binny Bansal-Backed PlanetSpark Reached Break-Even And Beat The Edtech Blues

As working harder gets replaced by working smarter thanks to automation and AI technology, communication and soft skills are just as relevant in today’s tech-driven world. PlanetSpark doubled down on this opportunity and even as other edtech platforms have struggled to make a mark, the company has turned cash flow positive after eight years of operations.

The Binny Bansal-backed startup will join the elite league of rare profitable edtech startups such as Physics Wallah by FY26 after reaching break-even in FY25, according to cofounder Kunal Malik.

Profit-making ventures are too rare in a sea of nearly 18,000 edtech startups in India. Even more so when XLRI graduates Malik and PlanetSpark cofounder Mahesh Dhoopar launched the startup in 2017.

The founders banked on a simple statistic to build on this idea. Nearly 4 Mn Google searches from India every month for soft skills with special focus on communication and language learning. Topics such as communication skill classes for kids, personality development for kids, and ways to boost a child’s confidence were the top searches.

“After-school activities, especially personality development and life skills, is an INR 10,000 Cr opportunity in domestic markets and, with international expansion, this could be an INR 20,000 Cr opportunity. Hence, the total addressable market (TAM) is still large,” PlanetSpark cofounder and CEO Malik told Inc42. 

It is this growth potential that wooed PlanetSpark to the K12 segment, which focuses on kindergarten to Class XII standard education. 

Even today, when the market is swept by GenAI, machine learning and tech skills development, Malik believes that there is a strong underlying demand for communication in English in India. Plus, AI has made real-time learning smoother through personalisation, while also minimising costs for the startup, the CEO revealed — read on to know more about how the startup leveraged AI for efficiency.

This thesis, according to the PlanetSpark CEO, is based on the fact that in India alone, the total addressable market for skills like communications is around 20 Mn children from the middle-income segment. 

“This represents an opportunity to create an INR 5,000+ Cr company in the Indian market. Additionally, about 20% of our traffic comes from outside India, including North America (the US and Canada), the Middle East, and a bit of the UK, which further expands our reach on a global scale,” Malik claimed.

Backed by the likes of Prime Venture Partners, Innoven Capital, besides Bansal, the startup has raised $31.3 Mn in funding so far, a relatively small amount given the huge inflow of capital in edtech between 2018 and 2021. This has been a key factor in PlanetSpark’s journey thus far too, pushing the startup to break-even in FY25, and the confidence of going for a public listing in the next two years. 

How PlanetSpark Reached The Break-Even Point

According to Malik, the company’s push for profitability came in FY24, when it raised $13 Mn in a funding round led by Prime Venture Partners. It vindicated this fundraise by cutting its losses by 70% to INR 26.6 Cr in FY24 from INR 89.5 Cr in FY23, while its revenue surged 60% to INR 67 Cr. 

The CEO claimed that gross bookings for the first two quarters of FY25 have already touched INR 61 Cr and the company was able to break even on a cash flow basis in this period. 

The cash flow break-even point means that a business’s operating cash inflows equal its operating cash outflows – it neither makes a profit, nor does it incur a loss based on cash flow.

“In FY25, the company achieved cash flow profitability during the first and second quarters – a major milestone showing that our operations are generating positive cash flow. Although we have narrowed the gap from FY24, we are not yet fully profitable on an accrual basis for FY25. However, we are very close to our target and expect to achieve full accrual profitability by FY26, starting from the first of April,” Malik claimed.

Accrual profitability refers to a company’s ability to generate profits based on the timing of revenue and expense recognition, rather than the cash flow basis. 

Beating The Edtech Blues With AI

The turn towards breaking even is all the more impressive given the woes in the Indian edtech sector in the post-pandemic world. While cumulative investment in edtech exceeded $11 Bn between 2014 and 2024, the sector suffered a drastic slowdown after 2022.

In the past two years, edtech made the unenviable record of having the most shutdowns and layoffs. While reopening of schools diminished the urgent need for digital learning, macroeconomic uncertainties, coupled with recession fears and soaring inflation made the investors risk-shy. Investors prioritised profitability over growth in the changing market dynamics.  

When large swathes of the edtech sector reeled under funding winter, PlanetSpark went on to cut costs across various levels to deliver results. Automating various processes helped the edtech firm become highly cost-efficient in terms of streamlining manual operations and optimising content delivery.

For one, the startup devised a SaaS product for teachers that enables digital class delivery. This product helped unlock growth for the company from educators, and helped further reduce costs since it was a subscription-based product.

“We also focused on driving organic revenue growth by expanding our social media presence, creating a production house for learner videos, and leveraging customer referrals. These initiatives together have enhanced our cost structure and played a pivotal role in achieving cash flow break-even in the first two quarters of FY25,” Malik said. 

Malik emphasised that some of the startup’s major product and growth strategies revolved around leveraging artificial intelligence. As a result, the focus was on product-led growth rather than acquiring customers through marketing campaigns.

“We added AI for scoring, personalisation and conducting classes, as well as for a differentiated pedagogy and curriculum. Over the last 8 years, we have critical data specific to language learning and communication skills, which is unique and differentiated from other platforms,” the CEO added.

Underpinning the importance of deploying the AI model, the PlanetSpark cofounder told Inc42 that the combined impact of automation and its in-house AI offering significantly reduced overheads and helped improve gross margins with AI-powered development accounting for nearly a quarter of platform’s learning modules.

However, it was not all smooth sailing. Malik claimed the company encountered challenges while integrating AI into its operations, especially when replicating emotional connection by human teachers.

“We quickly discovered that AI allowed us to excel in personalisation. Our AI-driven system tailors each child’s learning journey by adapting to their unique interests and learning styles. For example, if a child is fond of a particular character or topic, our content dynamically adjusts to bring that to life in a very engaging manner.”

The CEO believes that leveraging product-led growth allowed the startup to build based on customer feedback and strike an effective balance between automation and human touch, which is just as important in an AI-first world.

PlanetSpark’s IPO Dream 

After breaking even, the company is targetting net profitability in FY26. This is a critical step for the company, and coincides with its push for a public listing within the next two to two-and-a-half years.

“Our short-term goal is to continue the improvements we have  made in the company and officially, albeit informally, achieve profitability. That is  our first milestone. From there, we plan to grow the company to around $50 million in annualised revenue, which we see as the ideal scale for us to pursue an IPO,” Malik told Inc42.

The steady growth in business has kept the investor attention in PlanetSpark unabated. Malik believes that the focus on profitability gives the startup an edge, and means it doesn’t have to rely on ẻxternal funding for growth, even though interest from both Indian and international investors remains high.

PlanetSpark’s optimism is reaffirmed by a 55% surge in subscriptions this year. In terms of scalability, it saw a significant boost in revenue with 12.5% of it coming from working professionals.

“Our focus on enhancing communication skills has proven especially important after the 12th standard, when these skills become crucial for career success. This diverse demographic coverage, unlike typical tech platforms that cater to a narrower age band, has been a major growth driver in FY25 and sets us on course as we head into FY26,” Malik said. 

India constitutes 70-80% of PlanetSpark’s revenue at the moment, and more than 84% of the income is generated from middle-income groups. This reaffirms the fact that Indians in semi-urban areas and smaller cities are just as keen on enhancing communication skills across age groups as those in the metros and Tier 1 cities.

“Roughly 50% of our learners come from Tier 2, Tier 3, and Tier 4 towns. For example, we serve a school teacher in Nagpur, a retail shop owner in Meerut, and a bank employee in Vijayawada. This diverse demographic highlights the deep and widespread demand for enhanced communication skills across various age groups and income levels,” the CEO said.

A Bright Spark In Language Learning 

While the K-12 segment went into a slump when the schools reopened after the Covid-19 pandemic, language learning started getting the attention of small and large edtech companies in India.

SoftBank-backed edtech unicorn Unacademy, for example, forayed into the language learning model last year, positioning itself as a competitor to global language learning platforms like Duolingo and Babbel. 

The Indian language learning market saw significant growth in 2024, with the online learning platforms sector projected to reach $16.90 Bn in revenue by 2029, driven by increasing online education preferences and mobile learning adoption. 

PlanetSpark’s CEO acknowledges that the market is getting increasingly competitive, however, he claims the startup enjoys a first-mover advantage in the segment. User data and behavioural patterns collected over the last eight years also gives PlanetSpark a unique advantage, he claimed.

“We differentiate ourselves primarily through the deep, exclusive learning data we have gathered over our eight-year journey, with insights from nearly 1 Lakh learners on our platform.This data captures a wide array of learning styles and regional dynamics, such as learners in South India have a unique way of engaging that’s not there in other regions, and individual characteristics like whether a child is introvert or confident,” Malik told Inc42. 

He said that GenAI and machine learning offer great use cases when startups have existing data sets; it allows them to build products that competitors cannot replicate easily.

“Our first-mover advantage and deep market understanding further set us apart, and while we welcome competition as it validates the market’s potential and spurs innovation, our scale and the nuances we’ve built into our offerings keep us ahead in addressing our customer needs,” Malik explained.

Will the break-even milestone deliver the all-elusive profitability for PlanetSpark, and become a rare profitability story in India’s edtech landscape? Watch this space.

[Edited By Kumar Chatterjee]