The year 2022 in review appeared to have been difficult for a lot of ed-techs as these companies struggled to create a profitable business which is beyond the valuation. As a result, companies announced mass layoffs, restructured to save on cost of operations, and a few shut shops. Furthermore, funding in ed-tech startups dried by nearly 45% to $2.2 billion, data shared by private investment tracker Tracxn, revealed. Investors lost confidence in unicorns amid profitability concerns and economic slowdown predicted in the coming year. Most importantly, the ed-tech bubble seemingly burst as students returned to schools. This affected the business of many online majors who bloomed during the COVID-19 pandemic.
FE Education looks at some of these major ed-techs who have had a tough 2022
upGrad
Losses for Ronnie Screwvala’s ed-tech, upGrad, widened 180% to Rs 568.62 crore in FY22 from Rs 202.37 crore in FY21, according to regulatory filings accessed by business intelligence platform Tofler. The company reported a negative Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) of Rs 513.56 crore in FY22. As a result, upGrads’s networth took a fall to Rs 246.61 crore in FY22 from Rs 306.38 crore in FY21. The losses are believed to come at the backdrop of advertising and promotional expenses during the year.
Unacademy
SoftBank-backed Unacademy’ net loss widened 82.7% to Rs 2693 crore in FY22 from Rs 1473.5 crore in FY21. The company’s loss margin plunged nearly 375.31 % taking its networth to Rs 2285.53 crore. Interestingly, even as Unacademy sacked 2.6% of its workforce mainly from the sales and operation departments, the employee benefit cost of the company rose by 146% to Rs 1618.9 crore in FY22 from Rs 658.1 crore in FY21.
Byju’s
Amongst all, 2022 has been a rough year for ed-tech unicorn Byju’s which was encircled by controversies. The company got pulled up by the government for an 18 months delay in filing its financials. Byju’s net loss doubled to Rs 4,588 crore in FY21 from Rs 231.69 in FY20. Its founder and CEO, Byju Raveendran said that huge jump in losses was due to deferral of 40% of revenues to subsequent years. He claimed that losses will reduce in FY22, financials of which are yet to be officially released. Furthermore, the company was reportedly asked to make part-repayment of its $1.2-billion loan granted by a consortium including Blackstone, GIC, Fidelity among others. Byju’s is reported to have laid off 12,000 employees which is 25% of its workforce.
Vedantu
Another ed-tech company which incurred loss is Tiger Global-backed unicorn Vedantu. According to the company’s filings with the Ministry of Corporate Affairs (MCA), Vedantu reported a consolidated net loss of Rs 604.3 crore in FY21 up from Rs 150.1 crore FY20 as its employee costs soared 363.6%.
Physics Walla
Interestingly, Physics Walla which recently joined the unicorn club, emerged as the single player to turn profitable this year. The company’s operating revenue rose 845.76% to Rs 232.47 crore in FY22 from Rs 24.58 crore in FY21 while its net profit increased 1312% to Rs 97.75 crore in FY22 from Rs 6.92 crore in the corresponding year. The company is expected to steer forward strongly with announcements such as the launch of UPSC Walla and Buniyaad Series to expand its verticals.