Online platform Eruditus is on track to become the most grossing startup in the upskilling space as it expects to clock a gross revenue of $430 million (Rs 3,516 crore) for FY23, a 72% y-o-y growth compared to the previous financial year.
Singapore-headquartered Eruditus follows a July-June financial year and expects to close FY23, which ends on June 30, with record sales figure compared to all the previous years.
Speaking to FE, co-founder Ashwin Damera said that demand for upskilling courses amongst working professionals has grown by more than 60% y-o-y since the pandemic. He also expects the ongoing layoffs in the tech industry to contribute additional demand to edtech startups in the upskilling space as more white-collar workers look to pick up new skills to stay relevant in their job markets.
Edtech startups in India are currently active across three categories – upskilling, K-12 and test preparation. After seeing an initial growth in users both K-12 and the test prep platforms experienced a surge in new users during the lockdown in 2020, but began to falter in 2022 after classes reopened and as funding dried up. Upskilling platforms have relatively been able to manage the impact of the funding slowdown.
The edtech industry topped the list of sectors that conducted the highest number of layoffs in 2022. More than 18,000 employees are believed to have lost their jobs in the sector so far due to a downturn in the market. Large edtech firms such as Byju’s, Unacademy and Vedantu, among others, have reportedly slashed as many as 7,000 jobs.
Eruditus closely competes with other upskilling platforms such as Byjus-owned Great Learning and Ronnie Screwvala-led upGrad. Notably, Damera’s revenue forecast of Rs 3,516 crore for FY23 is significantly higher than its two closest competitors – upGrad and Great Learning. In FY22, upGrad clocked a consolidated revenue of Rs 692 crore, while Great Learning recently told the media that it expects to cross Rs 1,000 crore in revenue for FY23.
“We don’t see a slowdown in demand for upskilling despite all the macro factors indicating a global recession. Even with the rising number of layoffs in the tech industry, we expect affected employees to sign up for upskilling courses in new areas such as generative AI and management courses,” said Damera during the interview.
He added that since most of the layoffs were concentrated in the broad tech industry, other industries such as FMCG, retail and management consulting have not downsized. A majority of Eruditus’ students are working professionals and their course fee is subsidised by employers themselves.
“In non-tech markets, there has been no downsizing although hiring has slowed down. In these markets, we are seeing many mid to senior-level managers turning to online upskilling platforms for various executive management and finance courses,” Damera added.
Currently, Eruditus does not provide in-campus placements since a majority of its students are working professionals with an average of 8 years of work experience. However, Damera told FE that it plans to tie up with more institutions such as IITs to introduce online degrees with placement support in the near future.
“In my view, edtech platforms should never be promising 100% placement support to woo students, especially in the current climate of the economy…These can be misleading in many instances, and hence we have always stayed away from advertising placement support as a hook to bring in new students,” said Damera.
Founded in 2010 by Kalipatnapu and Damera, Eruditus provides executive-level programmes for working professionals. To date, the startup has raised more than $800 million in equity funding and counts SoftBank, Prosus, Sequoia, Chan Zuckerberg Initiative, GSV Ventures, among others, as its investors. In March last year, the startup also secured $350 million in debt capital from Canada Pension Plan Investment Board’s (CPPIB’s) credit arm to invest in mergers and acquisitions (M&As).