upGrad's net loss widens to Rs 626 crore in FY22 on rising employee costs

upGrad founders

Ronnie Screwvala's edtech startup upGrad reported a net loss of Rs 626.61 crore in FY22 on a consolidated basis, widening from a loss of Rs 211.1 crore in the previous year.

The losses widened as the company's employee benefit costs jumped nearly 2.4 times in FY22, according to upGrad's regulatory filings that were sourced from market intelligence platform Tofler.

The company's employee benefit costs surged to Rs 383.16 crore in FY22 from Rs 161.5 crore in FY21. upGrad, however, reported an over two-fold increase in FY22 revenue to Rs 682.21 crore on a consolidated basis.

upGrad's other expenses, which include advertising and marketing spends, jumped 2.5 times to a little over Rs 616 crore in FY22 from 247.6 crore in FY21 on a consolidated basis.

On a standalone basis, upGrad's total revenue jumped to Rs 519.39 crore in FY22 from Rs 302.87 crore a year earlier, the filings show. The company reported a net loss of Rs 568.62 crore for FY22 on a standalone basis as its expenses more than doubled to Rs 1,064 crore.

upGrad joins SoftBank-backed Unacademy to report a widening loss despite witnessing a surge in revenue for FY22, the second year of the Covid-19 pandemic that gave edtech companies a shot in the arm, thanks to stay-at-home restrictions. In October, Unacademy had reported a loss of Rs 2,848 crore for FY22, almost double the loss the SoftBank-backed edtech unicorn had incurred in FY21 on higher employee benefit and ESOP (employee stock ownership plan) costs.

However, unlike Unacademy and most other edtech companies, upGrad has not looked to cut costs aggressively so far this year. upGrad is also one of the only two edtech unicorns to not lay off employees in 2022. Edtech companies, in 2022, have laid off more than 8,800 employees, with Byju's and Unacademy, two of the most-valued edtech companies in India, laying off the most.

The company has also been on an acquisition spree as it has acquired more than 10 companies. In an interview with Moneycontrol in August, Mayank Kumar, Managing Director and co-founder of upGrad had said that upGrad could turn profitable by the end of this financial year (FY23) if it does not launch a new stream or does not invest in any more mergers and acquisitions.

upGrad had also recently announced that it would invest $30 million to launch 10 global institutes in the next year under its new brand UGDX. In August, upGrad had raised $210 million, in one of the largest funding rounds for edtech companies in India this year.