How Jaro Education Registered 2X YoY Growth In FY22 Profit By Upskilling Professionals

Indian edtech startups have been through a roller-coaster ride since the pandemic disrupted all physical classes in 2020. 

The sector saw a rapid peak in 2021 when virtual classrooms became the norm and startups boomed, supported by FOMO-driven VC dollars. Now that the brick-and-mortar education ecosystem is back in action, most edtech startups have hit rock bottom, laid off their people (More than 7K employees were asked to leave by December 2022) or went out of business. 

VC funding for Indian edtech startups has also dried up. According to Inc42 data, edtech startups raised $2 Bn in funding in H1 2022, a 38% decrease from $3.4 Bn raised in H2 2021.  

But there is a lone bright spot. 

According to a recent McKinsey report, large employers now consider employee upskilling and reskilling a necessity to bridge talent gaps without spending a bomb on new hires and thus drive the professional growth of their own workforce, which will effectively reduce the churn. In India, too, upskilling startups with B2B and B2C offerings (targeting both working professionals and freshers keen to learn employable skills) have successfully navigated post-Covid challenges, unlike their peers in the K-12 and test prep segments. 

But there is more to it than routine corporate training programs for working professionals. “We have been profitable in the last 12 years because we have heavily focused on career assistance and placement support [for those keen to take their career to the next level]. A focused approach helped us sustain,” said Dr Sanjay Salunkhe, founder of the skilling tech company Jaro Education. 

Set up in 2009, Jaro Education’s revenue has grown throughout the last and the current financial year, despite upheavals in the edtech industry. Inc42 accessed Jaro Education’s standalone financials (audited) for FY21 and FY22. The P&L statement revealed that it clocked a revenue of INR 81.1 Cr in FY22 – a 75% YoY increase from FY21 when it registered revenue of INR 46.3 Cr.

The brand’s EBITDA (earnings before interest, taxes, depreciation, and amortisation) stood at INR 8.11 Cr in FY21 and INR 11.9 Cr in FY22. 

It further revealed that Jaro Education’s net profit increased from INR 2.9 Cr in FY21 to INR 6.3 Cr in FY22 — clocking more than 2x YoY net profit growth, while its gross fee value jumped from INR 129.6 Cr in FY21 to INR 248.9 Cr in FY22.In FY23. The Mumbai-based edtech company aims to clock a 48% YoY revenue growth at INR 121 Cr and a 100% increase in EBITDA. 

The ‘skilling’ company offers more than 50+ online programs related to management and technology for entry to C-Suite-level learners. Some broad categories are analytics and data science, management and leadership, finance, cyber security and cloud computing among others. Jaro Education has catered to more than 1K enterprises (its B2B clients) for corporate training across sectors including fintech, ecommerce, consulting and more.

Bootstrapped And Sustainable: The Jaro Education Story

“We are growing sustainably because we are conservative when choosing partnerships and programmes. We focus on content quality, teaching methods and student satisfaction,” said Jaro’s CEO Ranjita Raman. 

During his stint as an HR professional in the 1990s, Salunkhe noticed how Indian executives hesitated to resume professional studies and learn alongside younger people. However, on his trip to the US in 1999, he witnessed the growth of online courses and their convenience and decided to introduce a similar learning model back home. 

At the time, digitalisation was still in its infancy in India. But the launch of several ecommerce platforms like Flipkart, OTAs like MakeMyTrip and Yatra, online ticket booking platform BookMyShow and other online businesses in the next 10 years fuelled the country’s internet economy, paving the path for early adopters of edtech. When Jaro started operations, it offered its online learners the convenience of pace, time and location and enjoyed the first mover’s advantage. 

However, the concept it promoted was new for corporate houses and working professionals. At that time, upskilling was not considered as essential for one’s professional growth as it is now. 

But the average response did not stop Salunkhe from pursuing his goal. He set up a dedicated sales team and approached businesses to help them understand the benefits of upskilling their employees. Gradually, top-rank corporate firms began warming up to the idea of upskilling and the benefits of rebuilding their talent strategy.

Incidentally, top-rung corporate leaders were among Jaro Education’s first enterprise clients. Although Jaro did not disclose the names, it claimed that these corporates belong to the automobile and healthcare sectors. 

“We offered tailor-made programmes for our partner companies’ in-house professionals so that they [the companies] would not have to recruit externally. These programmes were customised to be flexible and easily fitted into employee schedules,” said Salunkhe. Overall, it was a cost-effective measure for organisations.

Evolving with the changing market trends and professional needs, Jaro Education has even diversified its portfolio of courses, besides its flagship management programmes. Jaro offers technology-focussed courses in an array of subjects such as ethical hacking, coding, cybersecurity and digital transformation strategy among others. Plus, it has invested in interactive learning formats to deliver quality learning experiences.

But given the big-bang marketing tactics dominating the edtech sector (think of BYJU’S latest brand ambassador, Lionel Messi), how is Jaro’s low-key brand-building faring? 

According to Raman, Jaro Education has a dedicated marketing research team to track industry trends and its overall marketing burn accounts for 10%-12% of its revenue. The platform also conducts student surveys every three months. Based on the research and survey outs, the course content is upgraded.

Inside Jaro Education’s Learning Model

At Jaro, learners can pursue online courses at various levels, from undergraduate, post-graduate and doctoral programmes to long-term and short-term certifications. 

It has developed a robust learning management system called Jaro Education Learning Experience Platform, or JELXP, an AI-based integrated system that users can access right after enrolment without paying anything extra.   

“It enables students to track their assignment submissions, learning progress and course content coverage. Overall, it provides a seamless learning experience to every user,” said Raman.

Students can also leverage the LMS to mark their attendance, receive course materials and record lectures for revision. Universities are given access to JELXP to assess students’ assignments uploaded by them post-completion.

“We work with educational institutions as partners and not merely service providers. Our tech stack enables them to carry out the programme seamlessly and empowers them with regular demand insights and learner feedback. This is crucial for improvising and reaching a wider learner base,” said Salunkhe. 

To counter the stiff competition posed by upskilling majors like UpGrad and Simplilearn, Jaro has created a networking platform called Jaro Connect. This is essentially a community-building portal for networking and information exchange between current and former students. 

“Jaro Connect aims to break professional boundaries by leveraging networking opportunities and lifelong learning experiences,” said Salunkhe.

Additionally, it has set up 20+ offline centres across Tier 1 and 2 cities such as Mumbai, Delhi, Hyderabad, Lucknow and Kolkata for those looking to learn, network and grow with peers. These centres are equipped with large digital screens, hi-tech cameras, microphones and touch panels to facilitate student-faculty interaction where students are present physically while the courses are taught virtually by the teacher.

“People wanted to go beyond book learning and find a space for networking and post-lecture discussions. So, we set up these offline centres in 2018,” said Raman.

Jaro’s placement team also helps trained freshers from the institute find suitable jobs. “In fact, our placement assistance ensures that professionals are provided with full guidance related to their career, job switch, internal job growth, recommendations, resume-building, LinkedIn profile building and more,” said Salunkhe.

What’s Next for Jaro 

As the new normal settles in and technology rules every aspect of business and industry, Jaro Education plans to go global in the next 24 months. “We’ve commenced international collaborations, including Ivy League institutions and already set up offices in the US and Singapore,” said Salunkhe.

Asked about the current setback in the Indian edtech space, he blamed the humongous marketing cost and indiscriminate hiring for driving the edtech opportunity in the pandemic years.  

“We focus on delivering result-oriented practices by prioritising performance, profitability, and growth. Our results speak for themselves. Our students are our brand ambassadors, and it is evident from the large number of admissions that come through referrals given by students. Quality wins over everything else,” said Salunkhe.

The edtech blues may not be over yet, as 46% of investors think that the sector will continue to witness a funding squeeze. But this is a sign of correction and market maturity. The focus has shifted from high cash burn to achieving sustainability, something that the 13-year-old Jaro believes in too. The company has passed the sustainability test and has been EBITDA (earnings before interest, taxes, depreciation, and amortisation) positive since inception, it claimed. 

Pivoting and catering to the current market trends is another strategy adopted by edtech startups to stay afloat. 

Think of Unacademy’s venture into offline/hybrid learning or BYJU’S $600 Mn acquisition of the upskilling startup Great Learning. In other words, after the pandemic bubble burst, edtechs are now back to the drawing board, focussing on more profitable segments (like upskilling) and markets with more spending power. In the long haul, it will be interesting to see if they can evolve to fit the changing scenario and scale sustainably.