Edtech firm Vedantu’s revenue from its core business in FY23-24 fell below FY20-21 levels, marking the second straight year of decline and indicating continued slowdown in its core operations.
Vedantu’s decline in revenue can be attributed to challenges in the edtech industry, particularly the K-12 segment, including increased competition and the shift towards offline learning.
The Vamsi Krishna-led firm has shifted away from its earlier aggressive, fund-driven growth strategy to a more measured approach.
“The goal is to build a sustainable education company that focuses on quality, even if it’s on a small scale. The future of education, at least in our space, will be a mix of both offline and online,” Krishna said. Captable Earlier this year. “I’m sure Vedantu will get there eventually.”
The Bangalore-based company saw its standalone operating revenue fall 35.7% year-on-year (YoY) to Rs 77.6 crore in FY24. However, its consolidated operating revenue, including income from subsidiaries, rose 21% YoY for the financial year ending March 2024 to Rs. 184.5 crore has reached.
The startup’s total income, including interest income and profit on sale of current investments, was Rs 199.2 crore – up 14% in the fiscal year.
Notably, the edtech company narrowed its losses by 57.7% YoY, bringing it down to Rs 157.5 crore in FY24, according to its latest consolidated financial statements.
The narrowing of losses was driven by lower spending on employee benefits, which despite being the firm’s largest expense category, fell to Rs 175.7 crore – a 44% YoY decrease. Salaries and wages and employee share-based payments fell by almost half YoY.
Employee share-based payments are typically awarded to executives, senior management, key employees, and sometimes the broader workforce to incentivize performance and promote retention.
Vedantu’s last report was in December 2022, which affected 385 employees in its fourth round of layoffs that year.
Meanwhile, the edtech firm reduced its other expenses, such as ad promotion expenses by 70% YoY to Rs 22.8 crore, resulting in total expenses of Rs 367.7 crore – 33.5% YoY.
In September, Vedantu secured Rs 19.25 crore (or $2.3 million) in debt and equity capital from Stride Ventures. According to Tracxn, the company has raised a total of $326 million in 21 funding rounds.
Founded in 2014 by Krishna, Anand Prakash and Pulkit Jain, Vedantu became a unicorn in 2021 after raising $100 million in its Series E round led by Singapore-based ABC World Asia.
Recently, Unacademy reported a reduction in its losses by almost two-thirds but a decline in operating revenue in FY24 compared to last year.