Google-backed vernacular test prep platform Adda247’s revenue doubled, while its losses grew close to fourfolds for the fiscal year 2022-23, on the back of growing expenses as the company invested in its UPSC and vernacular segments.
The edtech company reported a net loss of Rs 109.72 crore in FY23, about 3.8 times higher than Rs 28.33 crore in FY22, according to its financial statement sourced by Moneycontrol.
“UPSC and vernacular are the major two focus areas for us and we are investing the most in these two. We plan to stay within the test prep and skilling segment,” said Anil Nagar, the co-founder and CEO told Moneycontrol.
Nagar added that Adda247 is aiming to reach profitability by FY25 and is also eyeing an IPO in the next two to three years.
Founded in 2016 by Nagar and Saurabh Bansal, Adda247 is an edtech startup that started with offering prep courses for exams in public sector banks, government departments, and the Indian Railways. The company caters to the learning needs of students from tier-two and lower-tier cities in India.
This fiscal the company has forayed into NEET, JEE and skilling and plans more investment into these segments, Nagar said. Adda247 currently has 50 million monthly active users and over 2 million paid users, the company said in a statement.
Expenses
The company reported Rs 239.37 crore in total expenses including changes in inventories of traded goods, employee benefit expenses, other expenses, depreciation and amortization, and finance cost.
This excludes an expense incurred on fair valuation of financial instruments held by external investors as it is a non cash notional expense. This accounts for about 2.6 times increase in the edtech's expenses of Rs 92.33 crore over the preceding fiscal.
“About 60 to 70 percent is our company's human resource expenses which includes faculty, tech, animation, and corporate and everything,” added Nagar.
Moneycontrol reported earlier that Adda247 spent as much as Rs 100 crore to poach five teachers from PhysicsWallah, another WestBridge Capital-backed company, to start a new platform on YouTube called Sankalp.
According to media reports, the edtech platform Adda247 laid off around 250-300 employees this month.
Revenue growth
Meanwhile, Adda247 reported Rs 129.65 crore in revenue in FY23, which was double its revenue of Rs 64 crore in the preceding fiscal.
To be sure, the company’s revenue growth year on year was higher than the same in the last year which stood at 67 percent. Nagar said that the company saw a fall in revenue growth in FY22 at the back of reduced exams in the government sector because of COVID.
“We were also a little under-pressure because of the impact of COVID. At the end of FY22, we raised funding and that's when we started expanding and investing into growth,” said Anil Nagar, the co-founder and CEO told Moneycontrol.
In October of last year, Adda247 said that it had raised $35 million in a funding round led by WestBridge Capital. Adda247 currently has 50 million monthly active users and over 2 million paid users, the company said in the statement.
At a time when many edtech companies that started with a purely online model are experimenting with offline and hybrid models after the post-pandemic slowdown in demand, Nagar said that Adda247 will continue in its online model.
“There is nothing like hybrid. It is either online or offline. Our focus is to do it online and we can see that we are doing well there,” said Nagar.
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