Prime Ventures-backed PlanetSpark records over 8X jump in scale in FY21

The pandemic has skyrocketed the demand of edtech platforms in India and this could be noticed from the bumper growth of scale of companies such as Unacademy, Cuemath and Lead School in FY21. Prime Venture Partners-backed PlanetSpark is also one such startup which recorded more than eight-fold jump in its operating revenue during the last fiscal year.

Its operating revenue ballooned 8.3X to Rs 4.97 crore in FY21 from a mere Rs 60 lakh in FY20, the company’s annual financial statements show.

PlanetSpark's revenue combinedly comes from the sale of services (coaching) and the sale of ebooks which recorded Rs 1.86 crore and Rs 3.11 crore respectively in FY21. The company also sell these services as a package which recorded 8.3X jump in FY21 when compared to the last fiscal year.

The company has also reported advance revenue amounting to Rs 2.81 crore under other current liabilities. This happens when a company receives payment from a customer before the product or service has been delivered.

According to Planetspark, the company is on track to cross Rs 100 crore in revenue in this financial year.

PlanetSpark is an edtech platform for communication development which offers 1:1 live classes in public speaking, creative writing, storytelling, debate, podcasting, stand-up comedy and poetry for children aged 4-16 years. The company claims a month-on-month growth of 30% and has coached students across 13 countries. 

The surge in scale also impacted the company’s annual expenditure, which jumped 5.3X to Rs 12.71 crore during FY21 from Rs 2.41 crore spent in FY20. Employee benefit payments emerged as the largest cost for the company and made up nearly 50% of its annual expense. Such cost shot up 9.2X to Rs 6.44 crore during FY21 from Rs 70 lakh paid out in the preceding fiscal year (FY20).

Payments to teachers on the edtech platform was the second largest cost for the company, accounting for  17.5% of PlanetSpark’s total expenses. This cost surged 18.6X to Rs 2.23 crore during the financial year 2021 from only Rs 12 lakh paid out in FY20.

The edtech startup’s marketing promotion expenses surged 5.9x YoY to Rs 2.08 crore while its legal & professional expenses increased 3.1X YoY to Rs 53 lakh during FY21. The company also spent Rs 94 lakh on IT, Communication and payment gateway fees during FY21.

The five-year-old company’s annual loss rose by 4.4X to Rs 7.72 crore in FY21 from Rs 1.74 crore in the preceding fiscal year. On a unit level, the Gurugram-based company spent Rs 2.56 to earn a single rupee of operating revenue.

In line with total expenditure that jumped over 5X, the edtech platform also saw a 2X jump in net cash outflows from operations during FY21 to Rs 2.5 crore during FY21 from Rs 1.23 crore in FY20.

The EBITDA margin of the edtech platform improved by 733 BPS to -145% in FY21 from -218.3% during FY20. The company has efficiently used its capital to grow and improved its returns on capital by 222 BPS to -46.4% during FY21 from -68.6% in the preceding fiscal (FY20).

PlanetSpark has raised $17.2 million to date. Apart from institutional backer, the Kunal Malik and Maneesh Dhooper-led company has also raised funds from FIIT JEE and angel investors like Binny Bansal, Deep Kalra, Ashish Gupta, Gokul Rajaram and Shirish Nadkarni.

With presence in India, the US, the Middle East and Europe, PlanetSpark is also eyeing a foray into new geographies and hiring 50,000 teachers on the platform by the end of 2022. Given the company’s expansion and hiring plans, its expenses are likely to widen in the ongoing fiscal year as well.