Edtech Brightchamps invest Rs 42.4 cr on advertising to generate Rs 22.5 cr from ops
Edtech business spending substantially on marketing to improve brand appeal is Brightchamps, a startup focused on K–12 education, which spent over Rs 2 simply on advertising to earn every Rs 1 in FY22 (2021–2022).
As per regulatory filings with the Ministry of Corporate Affairs (MCA) obtained through Tofler, Brightchamps, an edtech soonicorn (soon-to-be-unicorn) backed by investors like Binny Bansal, the founder of Flipkart, GSV Ventures, Premji Invest, and Beenext, among others, spent Rs 42.4 crore on advertising and marketing in FY22 to produce an operating revenue of Rs 22.5 crore.
The business, which raised around $63 million in a round led by Premji Invest in November 2021 and had a previous valuation of about $650 million, recorded total expenses of Rs 121.1 crore in FY22, which was its first full year of operations.
The edtech startup's biggest spend for the year, aside from advertising, was employee pay, which totaled about Rs 55 crore, according to its records. The company reported a net loss of Rs 98.6 crore for FY22 due to expenses that were approximately 5x higher than sales.
Brightchamps joined a long list of edtech startups that were heavily investing in branding in order to take advantage of the rapidly expanding online learning market of 2020 and 2021, which ultimately lost steam last year as a result of the reopening of schools, colleges, and physical tuition centres.
Similar to Teachmint, which is valued somewhat lower than Brightchamps but generated only Rs 80 lakh in operational revenue in FY22, the company's FY22 revenue likewise provides it a very high trailing twelve month (TTM) revenue multiple. According to data accessible on Tracxn, edtech businesses in India raised close to $5.4 billion in 2021 across 350 agreements, which is highlighted by the strong revenue multiples.
In contrast to the US, Canada, the UAE, Saudi Arabia, Indonesia, Malaysia, Thailand, and Nigeria, Brightchamps was launched in 2020 by Ravi Bhushan. Children between the ages of 6 and 16 can learn coding, money management, and robotics using Brightchamps' platform.
The business stated in 2022 that it will set aside $100 million for mergers and acquisitions in FY23 (2022-23). Yet, the business has only raised slightly more than $63 million thus far. Bhushan stated that the company has a very low cash burn and will be funding acquisitions using the money it has raised and through Brightchamps' stock in an interview.
