May 8, 2023

MUMBAI : Edtech startup Eruditus hopes to turn profitable during the current quarter on the back of increasing demand for upskilling and higher education, Ashwin Damera, co-founder and executive director, Eruditus Executive Education, said in an interview. Damera said the company is working towards Ebitda (earnings before interest, taxes, depreciation, and amortization) profitability. The company is actively pursuing acquisition opportunities for its enterprise business, and edtech companies offering advanced courses in fields like law, journalism, and specialized commerce, he added. According to Damera, the group is expected to close the financial year with a revenue run rate of around $450 million, up 50% from the $300 million clocked in FY22. “Going forward, we see our annualized revenue run rate growing to $560-600 million in FY24." The company is choosing to be fiscally prudent and is ready to sacrifice growth for better margins. “We are sacrificing some of our growth in order to contain costs of acquisition (CAC) and margins," he said. The company is targeting an Ebitda margin of 8-10% in FY24, which will make it one of the first edtech companies to hit profitability at the Ebitda level. Eruditus follows a July to June financial year. “A large part of the growth will come from existing tie-ups with universities. Even as we expand our partnerships with more universities, we are betting big on our enterprise vertical, which is also growing at a faster clip," Damera said. “We will selectively look at inorganic growth opportunities to bulk up our enterprise business," he added. “There are a lot of synergistic businesses available in this space in India, though there is no imminent deal now." Over the next 12 months, Emeritus, the edtech platform of the group, is looking to tie up with 85 universities and in five years, it expects to partner 150-200 universities. “It will still be just 1% of the total market and hence, the growth opportunity in front of us is huge," Damera said. Eruditus works with top universities across the US, Europe, Latin America, Southeast Asia, India and China to offer more than 100 executive-level courses to students in over 80 nations. It has tie-ups with more than 30 top-tier universities, including MIT, Harvard, Columbia, Cambridge, INSEAD, Wharton, UC Berkeley, IIT, IIM and NUS. The company says it offers short courses, degree programmes, professional certificates and senior executive programmes. Founded in 2015, Emeritus, part of Eruditus Group, has offices in Mumbai, New Delhi, Shanghai, Singapore, Palo Alto, Mexico City, New York, Boston, London and Dubai. Eruditus turned a unicorn — secured a valuation above $1 billion — when it raised $650 million in a new financing round led by Accel and SoftBank Vision Fund 2 in 2021. The funding round valued Eruditus at $3.2 billion. In response to a question about whether the company would consider raising new funds, Damera said the current market conditions were not conducive to raising capital. “It’s probably not the best time to raise capital because valuations have dropped. We are currently well-capitalized. We will raise if we need capital when we have identified inorganic growth opportunities," he said. The company that primarily offers courses in technology and engineering segments is looking to expand to newer areas such as law, journalism, nursing among others. “We will look for inorganic growth targets in these areas as well," he added.