Simplilearn shutters fresher upskilling, study-abroad units, cuts losses by 75%

Simplilearn shut down verticals such as fresher upskilling and study abroad to slash Ebitda losses by 75% to ₹51 crore in FY24, as the online training provider turns its focus to profitability.

Ebitda stands for earnings before interest, taxes, depreciation, and amortization, and is a key metric for a company’s performance and profitability.

“If your product is not strong and you spend more money, it might give you some numbers, but it’s not a sustainable number,” Krishna Kumar, founder and CEO of Simplilearn, said.

“We were a cash-generating business until 2021. In 2022-23, we spent a lot on marketing and other areas, but now we want to return to our old model. Growth might be slower, and that’s fine.”

Kumar added that the company will now focus on established segments like re-skilling for professionals and its B2B enterprise vertical. For the next few years, it is also focusing on skills around artificial intelligence and cybersecurity as it expects these segments to drive high growth.

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“We identified the areas where we are strong and focused more on those, deciding to exit areas where we aren’t as competitive. If we can’t be the number one or number two player in a category, we decided there’s no need to be number three or four,” he added.

As a result, the company’s revenue growth slowed. The company clocked a revenue of ₹773 crore in FY24, up from ₹701 crore in FY23.

The company is expecting to turn profitable by the next fiscal year. “We have become more thoughtful in terms of where we spend money. That has also increased a lot of efficiency since the money supply is tight,” he said.

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The upskilling market in India remained largely insulated from the downturn faced by the broader edtech industry until 2023. But the continued funding slowdown has led to founders across sectors to adopt a more cautious approach to growth spending, with many now prioritizing profitability and self-sufficiency over rapid growth.

What does the firm offer?

Founded in 2010, the company offers digital upskilling certifications to learners across the globe. Simplilearn currently offers over 1,500 live online classes each month, teaching over 8 million learners.

India accounts for 35% of Simplilearn’s overall revenue, while the US makes up close to 40% and the rest comes from regions like Saudi Arabia and the UK.

In July 2021, Blackstone acquired a controlling stake in Simplilearn through a $250 million fund infusion in the company. The deal paved the way for the exit of early investors such as Kalaari Capital and Mayfield.

Also Read: Edtech firms bet on upskilling, higher education and funding gloom

Going forward, Simplilearn has its eyes set on a public listing and plans to stay away from any more equity fundraise.

“If you raise money, you also must give return in proportion to that money. So, we don’t want to be in that game. We are at a stage where we want to be a comfortably growing, publicly listed company at some point, we are preparing more to be in that line,” he added.