Edtech giant upGrad’s revenue almost doubled during the year ended March 31, 2023. The startup said its revenue soared 96% to INR 1,194 Cr during the financial year 2022-23 (FY23) from INR 608 Cr in the previous fiscal year on the back of a strong growth in its paid-learners base.

upGrad said while its gross revenue stood at INR 1,530 Cr, it was adjusted after the startup moved to the widely accepted IndAS accounting standard during the year under review, in line with its long-term public listing plans. It added that its revenue would have been even higher in FY23 if not for deferment of collected revenue of INR 443 Cr. The startup carried forward this revenue into the next financial year as some of its mergers and acquisitions did not consolidate in FY23.

It must be noted that upGrad was on an acquisition spree in 2022, buying a number of edtech companies like data science institute INSOFE, Harappa Education and corporate training solutions provider Centum Learning.

Meanwhile, the strong growth in revenue helped upGrad marginally reduce its adjusted EBITDA loss to INR 558 Cr during the year under review from INR 572 Cr in FY22.

Founded in 2015 by Ronnie Screwvala, Mayank Kumar, Phalgun Kompalli and Ravijot Chugh, the Mumbai-based unicorn offers higher education courses and skilling programmes in collaboration with universities. It is backed by the likes of Temasek, Murdoch’s Lupa Systems, International Finance Corporation, and IIFL. 

upGrad competes with the likes of Coursera, Udemy and Simplilearn. 

The startup said its overall learner base crossed the 10 Mn mark in FY23, with the number of paid learners growing 54% year-on-year (YoY). It claimed it helped 55K learners transition into better job opportunities in the last financial year. 

Where Did upGrad Spend?

upGrad’s non-cash expenses stood at INR 584 Cr in FY23. Of this, goodwill write-down costs stood at INR 410 Cr, while depreciation and amortisation expense amounted to INR 140 Cr. Finance costs came in at INR 34 Cr.

Consequently, its net loss rose over 76% to INR 1,142 Cr from INR 648 Cr in FY22.

Among the major direct costs, upGrad was able to reduce its marketing costs to INR 371 Cr during the year under review from INR 403 Cr in FY22. At 36% of the total expenditure in FY23, employee costs continued to account for the biggest chunk of expenses. Employee expenses stood at INR 707 Cr in FY23 and also included some non-cash ESOP costs.

Direct costs, including content development expenses, content delivery costs, and university fees, grew 1.8X to INR 382 Cr from INR 211 Cr in FY22 as the company continued its investments in content development, content delivery, and university fees, in line with the growth in its revenue.

Business Outlook

upGrad cofounder and MD Kumar, in the statement, said that while the startup respects profitable growth, it aims to strike the right balance as it continues to make new investments with an eye on the long-term potential of skilling, careers and job placements, formal learning and workforce development space.

“Our gross margins are close to 80%, we have zero net debt and have one of the best ROCE (Return on Capital Employed) ratios for a new-age company, having raised a tight $265 Mn since inception. We are tracking H2 of FY24 and onward to be operationally profitable on an ongoing basis and will continue to look for organic, linear and non-linear opportunities for growth in Asia and around the world,” Kumar said. 

Highlighting its strong enterprise play, upGrad claimed to have served 1,110 clients in FY23 and said it expects to retain at least 75% of these clients in FY24. 

The edtech startup said its enterprise arm has expanded its global footprint and now expects international revenue to account for 21% of its total revenue in FY24 as against 10% in FY23.

The startup also claimed that it did not undertake any ‘material’ layoffs in the last 12-18 months, during which a number of edtech unicorns fired employees amid the ongoing funding winter. However, it is important to note that upGrad laid off 40% of the workforce at Harappa Education in January 2023. It also fired 120 employees at its video learning arm upGrad Campus in March this year. 

upGrad stated that the layoffs affected less than 4% of its total workforce (or 193 employees), out of its overall headcount of around 5,100.

It is pertinent to note that upGrad is among the few major edtech startups in India that have revealed their financials for FY23. In October, Tiger Global-backed Classplus disclosed that it recorded a 4X jump in its operating revenue to INR 102.04 Cr in FY23 from INR 25.9 Cr in the previous year. The edtech soonicorn’s net loss also grew 57% to INR 256.6 Cr from INR 163.5 Cr in FY22.