Gradeup eyes 10 mn monthly users by FY21-end, in talks for raising funds
Online exam preparation firm Gradeup has seen strong growth over the last few months as students logged onto digital platforms to continue studies amid the COVID-19 pandemic-related lockdowns, and is confident of its monthly userbase touching 10 million by the end of FY2021, a top official said.
The company is also in talks with investors for a a fresh round of funding that will be utilised in areas like strengthening technology, content and brand building, Gradeup co-founder and CEO Shobhit Bhatnagar told PTI.
“We have seen a massive uptake in edtech in last 5-6 months and what that has done is move edtech from being a support preparation mechanism to how people are primarily preparing…the growth in (monthly active) userbase (for Gradeup) will continue and by end of FY21, we should cross 10 million,” he said.
While the company has an overall userbase of 22 million, about 6 million are active on a monthly basis, he said.
The edtech space has seen strong growth globally with the COVID-19 pandemic serving as an inflection point.
While a number of players have raised fresh funding from investors, consolidation is also being seen in the industry with deals like Byju’s buying coding training platform WhiteHat Jr for USD 300 million and Unacademy acquiring PrepLadder for USD 50 million.
Bhatnagar said students are spending more time on the platform. Based on this insight, the company has unveiled a new offering ‘Gradeup Super’, which is a subscription-based learning model to facilitate unlimited access and enhanced understanding of subjects for students dabbling with different exam preparations.
He added that the time spent on the platform is expected to grow by 40-50 per cent with Super, while the paid userbase is estimated to grow 3X-4X.
He, however, declined to comment on the number of paid users on the platform.
Bhatnagar said while Delhi and Hyderabad were the top two cities for Gradeup, cities like Jaipur, Lucknow and Patna were larger markets for the company than other metros.
About 15 per cent of Gradeup’s paid users are from tier-I cities, and there is a high skew towards tier-II, III and IV cities, he added.
Talking about expansion plans, Bhatnagar said areas like content, technology and brand reach will be the focus of investment for the company in the next 3-6 months.
“Given the activity in the edtech space (amid the lockdown), we have received a lot of inbound interest and we are evaluating those conversations. And we hope to close another round of funding in the next 3-4 months, we will look at series B,” he said.
This could see the company, which has raised close to USD 15 million (about Rs 110 crore) till date, raising up to USD 30 million (about Rs 225 crore) in the next round.
Bhatnagar said Gradeup is about 12-15 months away from being cash flow positive.
“The intent is in next 12 months get to cash positive state, our gross margins are highly positive, but we are investing in tech, academics, building more capabilities. Next three years, we target to reach Rs 1000-crore-plus revenue,” he added.
The company is also exploring acquisitions to accelerate growth, he said.
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