B2B edtech company Eupheus Learning stands out as one of the few edtech startups achieving rapid growth while maintaining solid financial footing. Over the past two fiscal years, the company has experienced a remarkable four-fold increase, soaring from Rs 23 crore in FY21 to Rs 99 crore in FY23.
In terms of year-over-year growth, Eupheus Learning’s revenue from operations surged by 45.6% to Rs 99 crore in FY23 from Rs 68 crore in FY22, as indicated by its consolidated financial statements filed with the Registrar of Companies.
Eupheus Learning specializes in providing digital curriculum alongside supplementary modules to schools, predominantly through the sale of printed books, which accounted for 95% of its total operating revenue. This segment witnessed a substantial 94.9% increase, reaching Rs 94 crore in the fiscal year ending March 2023.
In 2021, the company expanded its offerings with the acquisition of ClassKlap, a platform facilitating school operations management, including administrative and academic functions. The remaining revenue was generated from the sale of digital products.
On the expense side, procurement of modules constituted 28.5% of the total expenditure, which rose by 28.6% to Rs 36 crore in the last fiscal year. Overall costs, including employee benefits, finance, advertising, legal-professional services, traveling expenses, and other overheads, escalated to Rs 126 crore in FY23 from Rs 81 crore in FY22.
Despite significant growth in scale, Eupheus Learning managed to marginally reduce its losses, which amounted to Rs 20 crore in FY23. The company also saw improvements in its Return on Capital Employed (ROCE) and EBITDA margin, which stood at -14% and -10.6%, respectively. On a unit level, it spent Rs 1.27 to earn a rupee in the last fiscal year.
Eupheus Learning’s last funding round was a $10 million Series C led by private equity platform Lightrock India in September 2021. Sixth Sense India holds the largest stake in the company with 31.82%, followed by Lightrock with 16.18%.
While the company’s improving financials are promising, it remains uncertain whether Eupheus has positioned itself to raise a new round at a similar or higher valuation as in 2021. Simply reducing burn rate may not be sufficient for Eupheus, given the fiercely competitive market it operates in. Scaling up inevitably incurs costs, particularly with high selling expenses in this sector. While the company’s numbers demonstrate market demand for its product, achieving sustainable financial performance still presents a significant challenge.
