upGrad income crosses Rs 300 Cr mark in FY21, losses jump 2.7X

The edtech market exploded in FY21 in the wake of the pandemic, with companies in this space seeing their scale soar. But there are a few companies that buck this trend. One of them is Mumbai-based upGrad, which has grown its revenue over the last fiscal year, but its scale hasn’t exploded like it has with others in this segment.

upGrad saw an 86% increase in operating profit to just over Rs 302 crore in FY21 from Rs 162.34 crore in FY20, according to regulatory filings from the company. For context, the company charges a commission on fees collected by universities and this commission income is the largest vertical revenue, accounting for 50.3% of its operating revenue.

This fee increased by 68.4% to Rs 152 crore in FY21 from Rs 90.2 crore received in the prior year.

upGrad markets its own courses on the edtech platform which accounts for 49.1% of operating revenue. These sales jumped 105.5% to Rs 148.2 crore in FY21 from Rs 72.1 crore in FY20. upGrad also offers recruitment services which generated another of Rs 1.8 crore for the startup in the last financial year.

Moving on to the expense sheet, we observed that marketing and promotion expenses are the largest cost center in the business, accounting for nearly 40% of annual costs. These expenses jumped 2.2 times to Rs 205.06 crore in FY21 from Rs 94.2 crore in FY20.


Digging deeper, we discovered that upGrad pays a commission to lenders facilitating student financing options on its platform and counts these costs as promotional spend, which explains the large amount of such spend.

Along with the growth in operational scale, the company has grown in terms of employee base, as evidenced by its personnel costs, which account for 31.4% of annual expenditure. These costs increased by nearly 80% year-on-year to Rs 161.53 crore and also included stock option expenses of Rs 7.6 crore.

The edtech unicorn pays its partner universities a fee to develop educational programs for students on its platform. These payments increased 3x to Rs 47.7 crore in FY21 from Rs 13.62 crore in FY20. of content engaged by the company exploded by 2.3 times per year to Rs 37.8 crore in FY21.

Overall, upGrad’s annual expenditure increased by 112.8% to approximately Rs 514 crore in FY21 from Rs 241.5 crore in FY20. spent Rs 1.7 to earn a single rupee of unit level income.

UpgradeWhile collections grew by 86%, EBITDA margins actually deteriorated from -45.6% in FY20 to -63.46% in FY21. And with worse margins on a larger scale, upGrad’s losses increased 2.7 times to Rs 211.13 crore in FY21 from Rs 79 crore in FY21. 20.

Even though upGrad’s overall financial performance for the year has seen growth, the company may need to work on unit economics. Unlike Unacademy (6X growth) and LEAD (2X growth), upGrad’s scale does not show the same scale level. But with demand for refresher courses increasing, this could help drive upGrad’s growth in the current fiscal year.

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