Brightchamps, a K-12 (kindergarten to class 12) focused startup, spent nearly Rs 2 just on advertising to earn every Rs 1 in FY22 (2021-22), in another instance of an edtech startup spending heavily on promotions to enhance brand appeal.
Brightchamps, an edtech soonicorn (soon-to-be-unicorn), backed by investors such as Flipkart founder Binny Bansal, GSV Ventures, Premji Invest, and Beenext among others, spent Rs 42.4 crore on advertising and marketing in FY22 to generate an operating revenue of Rs 22.5 crore, its regulatory filings with the Ministry of Corporate Affairs (MCA) sourced through Tofler showed.
Brightchamps, however, claimed that its expenses are carried from the India entity, while its revenue is collected in five different entities across the globe, including US, Vietnam, Bangladesh, Indonesia, and Singapore. So, the company's global revenue is much higher than what the India filings show.
The company, which was last valued at about $650 million when it raised about $63 million in November 2021 in a round led by Premji Invest, reported total expenses of Rs 121.1 crore in FY22, which was its first full year of operations.
Besides advertising, the edtech startup spent almost Rs 55 crore on employee salaries during the year, which was its biggest expense, its filings showed. With expenses almost 5x of revenues, the company reported a net loss of Rs 98.6 crore for FY22.
Brightchamps joined a long list of edtech startups spending aggressively on branding to capitalise on a rapidly growing online learning market of 2020 and 2021, which eventually lost steam last year, thanks to reopening of schools, collerges and physical tuition centers.
The company’s FY22 revenue also gives it a very high trailing twelve month (TTM) revenue multiple, just like Teachmint, which has a little lower valuation than Brightchamps, but earned just Rs 80 lakh as operating revenue. The high revenue multiples highlight the funding frenzy of 2021, when edtech companies in India raised close to $5.4 billion in 2021 across 350 deals, according to data available on Tracxn.
Brightchamps, founded in 2020 by Ravi Bhushan, has operations in over 30 countries including the US, Canada, the UAE, Saudi Arabia, Indonesia, Malaysia, Thailand, and Nigeria. Brightchamps runs a platform to teach coding, financial literacy, and robotics to kids aged 6-16.
In 2022, the company had said that it will earmark $100 million for mergers and acquisitions for FY23 (2022-23). However, the company has just raised a little over $63 million to date. In an interaction with Moneycontrol last year, Bhushan had said that the company has a very low cash burn and it will be funding acquisitions through the money it has raised and through Brightchamps’ stocks.
In August 2022, Brightchamps acquired Schola, Singapore-based communication and English-learning platform, for $15 million in a cash and stock deal, with all of the company’s employees, including its founding team retained by Brightchamps. Bhushan had told Moneycontrol that Schola’s acquisition will help Brightchamps in adding English speaking and communications vertical, a segment that will help it scale faster in its key markets--Southeast Asian countries such as Vietnam, Thailand and Indonesia.
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