Eruditus, the SoftBank-backed higher education and upskilling platform, has reported a narrower loss for FY23 (2022-2023), excluding exceptional items, as its revenue surged by more than 60%, defying the lackluster performance of edtech firms globally.
According to Ashwin Damera, Co-Founder and CEO of Eruditus, the company’s revenue grew to $400 million in FY22-23, up from approximately $245 million in the previous year. Meanwhile, the company’s losses, excluding expenses such as depreciation and ESOP, decreased to around $40 million from $66 million in FY21-22.
Damera further revealed that Eruditus achieved a small positive EBITDA, excluding ESOP, of about $3 million in the latest quarter (April-June) on a pro-forma basis. The company is aiming for an EBITDA of $40 million in FY24 (2023-2024), with a projected revenue growth of 40% to approximately $560 million.
The majority of Eruditus’ earnings, about 80%, come from abroad, while most of its expenses are incurred in India at lower costs, resulting in strong gross margins ranging from 50% to 60%.
Damera stated that the company’s core business, which encompasses US and European operations, achieved an 8% EBIT in the June quarter, and it is expected to reach 18% next year. The consolidated business is anticipated to be around 7%. Damera emphasized the excitement of achieving profitability in the current environment, where profitability is highly valued.
Amidst its impressive growth, Eruditus is looking to raise approximately $150 million through a blend of primary and secondary share sales. If the narrowing losses and growth momentum are accurate, it could significantly boost the company’s valuation, which is particularly important in a period of declining edtech valuations worldwide.
Founded in 2010, Eruditus offers programs for working professionals and has raised over $814 million in equity funding to date. Notable backers include SoftBank, Prosus, Sequoia, the Chan Zuckerberg Initiative, and GSV Ventures. In August 2021, the company raised its largest-ever round of $650 million at a valuation exceeding $3.2 billion. Since then, Eruditus has not engaged in any equity funding.
In its pursuit of growth, Eruditus is focusing on its enterprise offering, which currently accounts for 10% of its business but is the fastest-growing segment. The company is also expanding into the healthcare sector and witnessing increased demand in Europe and the US for sustainability-related programs.
Despite its previous plans for mergers and acquisitions, Eruditus is now adopting a more conservative approach, considering the rising threshold for such deals. However, the company remains open to acquiring companies that align thematically with its goals, such as those offering enterprise solutions in the US or startups providing courses in untapped markets in India.
Eruditus has not resorted to mass layoffs, although it did release around 40 employees in June last year. The company scaled back its experiments in various markets and instead shifted roles from the US and Europe to India to rationalize costs.
While Eruditus currently operates exclusively online, Damera believes that offline distribution in higher education presents interesting models that the company may explore in the future.
By adhering to these strategies, Eruditus aims to solidify its position as one of the world’s largest upskilling and higher education platforms by revenue. With its sustained growth and focus on diverse offerings, the company is poised to make a significant impact in the global edtech market.
