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upGrad income crosses Rs 300 Cr mark in FY21, losses jump 2.7X

The edtech market has exploded in FY21 on the back of the pandemic with companies in this space witnessing their scale skyrocket. But there are a few companies bucking this trend. One such is Mumbai-based upGrad which grew its income during the last fiscal year but its scale didn’t blow up as it did with some others in this segment. 

upGrad saw a 86% increase in its operating income to a little over Rs 302 crore during FY21 from Rs 162.34 crore in FY20, shows the company’s regulatory filings. For context, the company charges commission on the fee collected by universities and this commission income is the largest revenue vertical, accounting for 50.3% of its operating revenues.


Such commission grew by 68.4% to Rs 152 crore in FY21 as compared to Rs 90.2 crore collected in the preceding fiscal year.

upGrad sells its own courses on the edtech platform which made up 49.1% of the operating revenue. These sales surged by 105.5% to Rs 148.2 crore during FY21 from Rs 72.1 crore in FY20. upGrad also offers recruitment services which generated another Rs 1.8 crore for the startup during the last fiscal year.

Moving over to the expense sheet, we observed that marketing & promotional expenses are the largest cost centre for the company, accounting for nearly 40% of the annual costs. These expenses surged 2.2X to Rs 205.06 crore in FY21 from Rs 94.2 crore in FY20.


Digging deeper, we found out that upGrad pays a commission to lenders facilitating financing options for students on its platform and recognises these costs under promotional expense—explaining the large quantum of these expenses.

Along with the growth of operational scale, the company grew in terms of employee base as reflected in its staff costs, which make up 31.4% of the annual expenses. These costs grew by nearly 80% YoY to Rs 161.53 crore and also included stock option expenses of Rs 7.6 crore.

The edtech unicorn pays its partner universities fee for developing educational programs for students on its platform. These payments ballooned 3X to Rs 47.7 crore during FY21 from Rs 13.62 crore in FY20. During the same period, content development and delivery costs incurred by the company blew up 2.3X YoY to Rs 37.8 crore in FY21.

Overall, upGrad’s annual expenditure grew by 112.8% to around Rs 514 crore in FY21 from Rs 241.5 crore in FY20. upGrad spent Rs 1.7 to earn a single rupee of revenue on a unit level.

upgradWhile the collections have grown by 86%, EBITDA margins actually worsened from -45.6% in FY20 to -63.46% in FY21. And with worse margins on a larger scale, upGrad’s losses have grown 2.7X to Rs 211.13 crore in FY21 from Rs 79 crore during FY20.

Even as upGrad’s overall financial performance for the year witnessed growth, the company may have to work on unit economics. Unlike Unacademy (6X growth) and LEAD (2X growth), upGrad’s scale didn’t growth doesn’t show the same level of scale. But with demand for upskilling courses picking up, it may help boost upGrad’s growth in the ongoing fiscal year.

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