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

Upskilling company Simplilearn is on the path of course correction as it shut down growth verticals like fresher upskilling and study abroad to slash losses by 75 percent in FY24, even as revenue growth takes a backseat.

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

“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 reskilling and its B2B enterprise vertical. For the next few years, the company is also focusing on skills around artificial intelligence and cybersecurity as it sees these segments to drive high growth.

“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 took a hit. The company clocked a revenue of ₹773 crore up about 13% from ₹684 crore in the previous fiscal. Meanwhile, its losses shrunk drastically by about 75 percent to ₹244 crore.

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 because now since the money supply is tight,” said Kumar.

The upskilling market in India remained largely insulated from the downturn faced by the broader edtech industry until 2023. However, the continued funding slowdown across the startup ecosystem has led to founders across sectors to adopt a more cautious approach to growth spending, with many companies 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 20% comes from regions like Saudi Arabia and 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.

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.