Tiger Global-backed edtech unicorn Vedantu's net loss widened fourfold in 2020-21 (FY21) despite revenue surging nearly three times as employee costs soared.
Vedantu reported a consolidated net loss of Rs 604.3 crore for FY21, against Rs 150.1 crore in 2019-20 (FY20), the company's filings with the Ministry of Corporate Affairs (MCA) showed.
Consolidated revenue, however, rose to nearly Rs 135 crore for FY21, thanks to a jump in demand for remote learning due to lockdowns during the year.
The edtech company, which got valued at over a billion dollars in September last year, reported a fourfold increase in expenses to Rs 744 crore for FY21 from Rs 186 crore a year earlier, as its employee benefit expenses rose to Rs 408 crore in FY21 from Rs 88 crore in FY20.
Vedantu joins other edtech unicorns such as upGrad, Eruditus and Unacademy to report a sharp rise in revenues for FY21 due to the unprecedented pick-up in demand for technology-based education solutions. However, these companies have reported widening losses for the year as their employee benefit costs and marketing expenses have gone up.
Vamsi Krishna, co-founder and chief executive officer of Vedantu, in a recent interaction with Moneycontrol, had said that the company grew nine-fold in 2021-22 (FY22). Krishna, however, agreed that he expects the company to grow at a slower pace in 2022-23 (FY23).
"The growth that we saw over the last two years was unprecedented and you will see it coming down a bit. But that doesn't mean growth will not happen," Krishna had said.
"A 9x growth will perhaps become a 3X growth," Krishna added.
Krishna's comments come at a time when edtech companies in India are witnessing a blip in demand for technology-based education solutions. Moneycontrol had reported how edtech companies are struggling post the pandemic. Many companies have also resorted to mass layoffs, streamlining of verticals, and reducing advertising and marketing spends.
Vedantu, in May had laid off about 624 employees or about 10 percent of its workforce, in a bid to reduce expenses and focus on profitability. Krishna, in a blog post, had said that the Tiger Global-backed company is expecting a scarcity of funds in the coming quarters.
In April this year, in an interview with Moneycontrol, Krishna, also had said that the company would look to acheive a 25 percent profit margin within the next 18 months and will also look to float an IPO (initial public offering).
Vedantu, founded in 2011 by three IIT graduates, Krishna, Anand Prakash and Pulkit Jain, provides an online tutoring platform for K-12 (Kindergarten to class 12) students. The company also has a learning platform for medical and engineering entrance tests like IIT-JEE and NEET.
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