Edtech unicorn Unacademy has reduced its losses by nearly two-thirds, but worryingly, operating revenue in FY2023-24 has declined compared to the previous year.
The Bangalore-based firm reported a consolidated loss of Rs 630.9 crore in FY24, down 62.4% from Rs 1,678.1 crore recorded in the previous fiscal. Meanwhile, its operating revenue fell 7.4% year-on-year to Rs 839.8 crore in FY24, according to the latest consolidated financial statements obtained from Toffler.
The startup’s total income, including interest income on current investments, stood at Rs 988.5 crore in the fiscal year ended this March – down 5.4% this year.
The decline in revenue comes as the edtech company focuses on the offline front to grow revenue, while its revenue from the online test preparation segment—its core business—experiences a slowdown.
A week ago, co-founder and CEO Gaurav Munjal said in a LinkedIn post that the current year, or FY25, will be “Unacademy’s best ever” in terms of growth in offline business and overall unit economics.
He noted that the business of Unacademy’s offline centers grew by 30%, but the online test preparation business experienced a decline, with both channels showing significant improvement in unit economics.
Meanwhile, the company is focused on cutting costs, which has helped it reduce losses in fiscal 2024. Overall, the firm’s expenses fell by 40.5% YoY to Rs 1,627 crore last fiscal.
This was driven by a sharp decline in employee benefits, which fell by 57.9% to Rs 539.2 crore in FY24. Despite the cuts, it remains the largest spending category.
The decrease in employee benefit spending reflects a wave of layoffs and senior-level departures. The firm’s total managerial remuneration, including directors’ salaries, fell 85.2% YoY to Rs 21.4 crore in FY24. Additionally, its total employee share-based payments declined by 71.1% YoY to Rs 183 crore.
Employee share-based payments are typically awarded to executives, senior management, key employees, and sometimes the broader workforce to incentivize performance and promote retention.
In June, Unacademy co-founder Hemesh Singh stepped down as chief technology officer to take up an advisory role. Last month, it experienced another top-level exit, with senior vice president of design and manufacturing Hardik Pandya announcing his departure after a four-year stint with the Bengaluru-based firm.
Meanwhile, the firm managed to reduce its other expenses, such as ad promotion expenses, by 34% to Rs 244.3 crore in FY24.
According to the Unacademy chief, the company’s group-level cash burn has fallen by 50%, and it now has cash reserves of $170 million with no debt and a runway of more than four years.
“We are building the academy for the long term. We are not doing any sale or M&A. Ignore the rumours,” noted his week-old post. Reports have highlighted a potential M&A with offline coaching institute ALLEN and school education and technology services provider K12 Techno Services.
Meanwhile, Munjal has taken to social media to express his excitement about Unacademy’s new offering – a language learning app called Airlearn.
His LinkedIn post said that Airlearn crossed nearly $400,000 ARR in the US within a few months of its launch. A language learning app adds another revenue stream for an edtech firm
The majority of users on the app are from the US, with Spanish and French being the most popular languages, he previously shared in a post on social media platform X.
Airlearn (formerly Unacademy Languages), launched in India in June, exists to compete with other global language learning apps like Duolingo and Babbel.