Simplilearn closes new upskilling and study abroad units, reducing losses by 75%

Skilling company Simplilearn is on a course correction path as it closes growth verticals such as upskilling and study abroad to cut losses by 75% in FY24, even as revenue growth takes a back seat.

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

“We were a cash-generating business until 2021. We invested heavily in marketing and other areas in 2022-23, but now we want to get back to the old model. Growth may be slower, but that’s okay ”

Kumar added that the company will now focus on mature segments such as reskilling and B2B enterprise verticals. The company will also focus on skills in artificial intelligence and cybersecurity in the coming years, as it believes these areas will drive high growth.

“We identified our areas of strength and focused more on those areas, deciding to exit areas where we were not very competitive. If we cannot be the number one or number two player in a category, we decided there was no point in becoming the number three or number three player. Fourth,” he added.

As a result, the company’s revenue growth took a hit. The company’s revenue is $7.73 billion, a year-on-year increase of approximately 13% $684 crore in the previous fiscal year. At the same time, its losses shrank significantly by about 75% to $244 crores.

The company expects to be profitable in the next fiscal year. “We have become more thoughtful in how we spend money. This has also greatly improved efficiency because money supply is tight now,” Kumar said.

By 2023, India’s upskilling market will be largely insulated from the downturn facing the broader edtech sector. However, the continued slowdown in funding across the startup ecosystem has led founders across industries to take a more cautious approach to growth spending, with many companies now prioritizing profitability and self-sufficiency over rapid growth.

What does the company offer?

Founded in 2010, the company provides digital upskilling certifications to learners around the world. Simplilearn currently offers more than 1,500 live online courses every month, teaching more than 8 million learners.

India accounts for 35% of Simplilearn’s total revenue, the United States accounts for nearly 40%, and the remaining 20% ​​comes from regions such as Saudi Arabia and the United Kingdom.

In July 2021, Blackstone acquired a controlling stake in Simplilearn by injecting $250 million into the company. The deal paves the way for the exit of early investors such as Kalaari Capital and Mayfield.

Going forward, Simplilearn is eyeing a public listing and does not plan to raise any further equity capital.

“If you raise money, you also have to give back a proportion of that money. So, we don’t want to play that game. We’re at a stage where we want to be a comfortable growing public company at some point, and we’re setting the stage for that. One goal is more preparation,” he added.