SoftBank-backed Unacademy’s losses shrunk 41 percent in FY23 (2022-23) as the edtech startup’s employee benefit expenses fell nearly 40 percent in a period when the company conducted massive cost-cutting efforts to extend its runway.
Unacademy reported a net loss of Rs 1,678.15 crore for FY22 against a net loss of Rs 2,848 crore a year earlier, according to its financials sourced from the Ministry of Corporate Affairs. During the period, the company’s employee benefit expenses fell to Rs 1,281.28 crore from Rs 1,771.64 crore in FY22.
The test prep edtech company let go of over 2,000 employees since the beginning of 2022 in an attempt to reduce its expenses amid an ongoing funding crunch in the startup ecosystem, especially impacting the edtech sector.
To be sure, Unacademy’s employee benefit costs grew to Rs 1,772 crore in FY22 against Rs 749 crore a year earlier.
The edtech unicorn’s total expenses declined to Rs 2,734.22 crore in FY22 from Rs 3,703 crore a year earlier. The company’s employee benefit expenses accounted for 47 percent of the company’s total expenses.
Unacademy, meanwhile, reported a 26 percent rise in operating revenue to Rs 907 crore from Rs 719 crore a year earlier. To be sure, the growth was lower than a year ago when the company witnessed over 80 percent rise in operating revenue from Rs 398 crore. Its total income surged to Rs 1,044 crore in FY23 from Rs 845 crore a year earlier.
Also Read: Inside Unacademy: Slowing growth, failed acquisitions, a problem of plenty
Unacademy has joined a growing list of startups to report reducing losses on the back of investors reducing exposure to high-growth loss-making startups. Other edtech unicorns like upGrad and Eruditus recorded a fall in their losses too.
This follows a year when a noticeable slowdown in demand for edtech companies became evident to investors, with several models, heavily reliant on online delivery, continuing to suffer. On the back of a drying-up funding pipeline, this resulted in an apparent reversal in the trend of aggressive expenditure on advertising and promotions, and employee benefits.
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