Classplus, an edtech startup based in Delhi NCR, experienced a significant increase in its net loss for the financial year that ended on 31 March, 2023. The company’s net loss rose by over 57 per cent during this period, reaching Rs 256.6 crore, compared to Rs 163.5 crore in the previous fiscal year.
However, Classplus also saw substantial growth in its operating revenue, which increased more than fourfold from Rs 25.9 crore to Rs 102.04 crore. The main source of revenue for the startup is the sale of subscriptions to online educators.
When considering other income, including investments from Tiger Global, Classplus reported a total income of Rs 149.1 crore in the fiscal year, compared to Rs 45.4 crore in the previous year.
The startup’s expenses nearly doubled during the same period, reaching Rs 405.2 crore in FY23 (financial year 2023), compared to Rs 208.9 crore in the previous fiscal year. Employee benefits constituted the largest portion of these expenses, with Rs 228.9 crore spent on employee wages, PF contributions, gratuity and other benefits. Classplus currently employs around 806 people.
Advertising expenses increased by almost 50 per cent to Rs 51 crore, while IT expenditure decreased by 21 per cent to Rs 40.3 crore in FY23.
On a unit economic basis, Classplus spent nearly Rs 4 for making every Rs 1 operating revenue. The company’s EBITDA (earning before income, tax, depreciation and amortization) and margin improved from about 353.7 per cent in FY22 to about 156.6 per cent in FY23.
Founded by Mukul Rustagi and Bhaswat Agarwal, Classplus is a mobile-first SaaS platform that helps educators and content creators establish an online presence, digitalize their offline tuition centers, and sell their courses online.
To date, the startup has raised close to USD 130 million in funding from investors such as Peak XV Partners, Blume Ventures and Alpha Wave Ventures.
Earlier this year, Classplus faced legal issues when its acquisition of Saarthi led to a lawsuit filed by Saarthi’s Co-founder Chiraag Kapil and investors in the Delhi High Court. The lawsuit alleges cheating and criminal breach of trust, as the investors did not receive the agreements and corresponding equity they were entitled to after the acquisition.
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