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If last year was all about preparing people to shift to online learning, this year it is all about building loyalty. That’s why edtech firms such as Gradeup which is backed by Times Internet, plans to increase its marketing spends by 2x to Rs 56 crore in FY22, Shobhit Bhatnagar, co-founder and CEO, told BrandWagon Online. Its marketing spends stood at around Rs 28 crore in FY21. “Our focus has purely been on digital and performance-based ads. Therefore, 60-70% of our spends would go to digital platforms including Facebook, Google, among others. We will also look at regional mediums including print, OOH as well as other ATL platforms besides OTT channels,” he added. The company claims that its net revenue stood at close to Rs 60 crore in FY21, thereby clocking a growth of 2.5 times over FY20, however, when asked, Bhatnagar refused to divulge net loss for the year.
Grade Stack Learning Private Limited, the parent company of Gradeup, posted net revenue of Rs 24 crore in FY20, while net loss stood at Rs 33 crore, according to the regulatory filings accessed by business intelligence firm, Tofler.
The edtech company claims to have an active monthly user base of about 3.5 million-4 million students, who spend about 100 minutes in a month, while the total registered user base stands at 3 crore. It further claims that close to 35000-40,000 new students subscribe to the platform every month. The company expects that by FY22, close to one million students would be part of the platform. “People are on the lookout for previous year tests, exam analysis as well as a content library. We have tried to build these pieces of free content for users. Post the lockdown, the engagement on this free content started skyrocketing,” Bhatnagar observed. Cities such as Agra, Kanpur, Visakhapatnam, Coimbatore, form the core of Gradeup’s audience base — with 65-70% of the user base coming from smaller cities outside the state capitals.
Its marketing and advertising spends in FY20 stood at 14.7 crore. “Our overall expenses are 70% higher than what they were in FY20. Our losses are higher than FY20 but this is because we invested in marketing besides building faculty strength,” Bhatnagar said, adding that in the edtech space, gross margins are very high hence people tend to overspend on marketing to acquire more users. As per him, the cost of customer acquisition has gone up by 30% because of increase in competition.
Going forward, Gradeup plans to follow a hybrid approach to reach out to a larger audience base across the country– through tie-ups with offline coaching institutes and education providers. For Bhatnagar, the quality and the ease of access online education has started to provide, from a cost perspective, is likely to cause growth in the sector for the next few years.