Unacademy’s revenue surges 5.6X during FY20

Edtech in India soared above expectations of the ecosystem during 2020. The sector was propelled by the unexpected disruption across offline educational institutions due to the pandemic and the consequent push to digital learning. Around $2.22 billion was poured in Indian edtech platforms in the last year as the sector caught the interest of both venture capitalists and private equity players alike.

One such firm that benefited from this influx was Unacademy which raised close to $350 million with its valuation surging to $2.01 billion. While 2020 has turned out to be an exceptional one for the Bengaluru-based firm, its momentum of growth began in FY20 itself when the company witnessed a four-fold increase in its topline.

Unacademy’s total income grew 4X from Rs 22 crore in FY19 to a little over Rs 86 crore during FY20. The company’s revenue from operations ballooned 5.6X from Rs 11.7 crore in FY19 to nearly Rs 65 crore during the fiscal ended in March 2020. 

Around 95% of this revenue was earned from the provision of educational services and the rest was recorded as advertising and related non-operating income.

While the company has not filed notes to accounts along with financial statements, let’s take a look over how Unacademy deployed funds to achieve this growth. Expenses related to employee benefits grew by 114%  to Rs 91.8 crore in FY20 from Rs 42.8 crore in FY19 as the company expanded its scale of operations.

Expenses filed under “other expenses” accounted for 75% of the total expenditure during the last fiscal. These costs shot up 4.2X to Rs 290.55 crore in FY20 from Rs 68.4 crore spent in FY19. It’s worth noting that the company has only filed the top sheets of the financials without the detailed schedules.

Besides employees benefits, it appears that other expenses include educator, marketing and technology costs.

Further, depreciation and finance costs of Rs 4.46 crore pushed the company’s total expenditure to Rs 386.6 crore during FY20. It’s a 3.3X leap from the total spending of Rs 112.2 crore in FY19. Unacademy spent Rs 5.96  to earn a single rupee of operating revenue in FY20, improving by 38% as compared to Rs 9.61 spent to earn the same in FY19.

Like any other growth-stage startup, Unacademy burned through the capital to fuel the expansion of scale as evident by a 2.7X jump in its net cash outflow from operations, which stood around Rs 231 crore during FY20.

While the company’s losses grew 3.3X to Rs 300.8 crore during FY20 from Rs 90.3 crore in FY19, it managed to improve its EBITDA margins from -765.93% in FY19 to -456.72% in FY20. Despite the improvement, the edtech platform will have to work extensively to bring these margins to sustainable levels as they go on with the deployment of assets in coming fiscals.