EdTech Vedantu FY23 Revenue Dips 7.8% With 46% Reduction in Losses

Vedantu's FY23 Revenue

Three points you will get to know in this article:

  • Vedantu’s revenue down 7.8% in FY23, but losses cut by 46.4%.
  • Cost-cutting increased profits, but challenges remain in ROCE and EBITDA.
  • Vedantu raising $328M in 20 rounds, expanding beyond online tutoring.

Vedantu's Revenue Declines, but Losses Significantly Reduced

vedantu logo

Bengaluru’s edtech startup Vedantu saw its operational revenue decline by 7.8% to Rs 153 crore in FY23, down from Rs 166 crore the previous year. Notably, the company significantly cut its losses by 46.4%, reducing them to Rs 373 crore from Rs 696 crore in FY22.

The company’s main source of income is online tutoring, which makes up 94% of its total operating revenue. However, revenue from this sector decreased by 13.3% to Rs 144 crore in FY23. The rest of the revenue was generated from book sales, hostel fees, and income from e-learning projects. Furthermore, the company earned Rs 22 crore from interest and gains on financial assets, bringing its total income for FY23 to Rs 175 crore, a decrease from Rs 191 crore in FY22.

Cost-Cutting Measures Propel Vedantu's Profitability Improvement

Vedantu’s foremost expenditure focal point shifted to employee benefits, representing 56.7% of the total outlay. Nevertheless, there was a notable 35.8% decrease in the cost of employee benefits, amounting to Rs 314 crore in FY23. The overall expenditure witnessed a decline, plummeting from Rs 888 crore to Rs 553 crore in FY22. This reduction was primarily propelled by diminished allocations towards legal affairs, advertising and promotional endeavors, and information technology. Particularly noteworthy is the significant drop in advertising and promotional expenditures, which decreased to Rs 76 crore from Rs 182 crore, while information technology costs stood at Rs 21 crore.

Vedantu's Financial Performance: Challenges and Opportunities

Vedantu’s financial performance displays a nuanced outlook. The company’s Return on Capital Employed (ROCE) and EBITDA margins stood at -68% and -198.9%, respectively, presenting challenges in profitability. At a granular level, Vedantu expended Rs 3.61 to generate a single rupee of revenue in the fiscal year 2023.

Vedantu's Journey: From Startup to Unicorn

As of March 2023, Vedantu reported a net current asset of Rs 299 crore, inclusive of cash and bank balances totaling Rs 39 crore. Established in 2011 by Vamsi Krishna, Anand Prakash, and Pulkit Jain, Vedantu achieved unicorn status in 2021 after securing a $100 million Series E investment led by Singapore’s ABC World Asia. The startup has garnered a cumulative funding of $328 million through 20 funding rounds.

Vedantu, the Bengaluru-based edtech startup, faced a 7.8% decline in operational revenue in FY23, but significantly reduced its losses by 46.4%. While online tutoring remained the primary revenue source, the company diversified into book sales, hostel fees, and e-learning projects. Cost-cutting measures, including a 35.8% decrease in employee benefit costs, helped improve profitability, though challenges remain in terms of ROCE and EBITDA margins. Vedantu’s journey from a startup to a unicorn, backed by $328 million in funding, highlights its evolving business model and diversification efforts.

SA Team

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