FIITJEE-backed PlanetSpark trims losses by 70% in FY24

Edtech platform PlanetSpark secured $17 million in funding, led by Prime Venture Partners by the close of FY24. This major investment follows the company's steady growth and reduced losses in the fiscal year ending March 2024.

PlanetSpark’s revenue from operations grew 60% to Rs 67 crore in FY24 from Rs 42 crore in FY23, its annual financial statements sourced from the Registrar of Companies show.

PlanetSpark offers live 1:1 classes in public speaking, creative writing, storytelling, debate, podcasting, stand-up comedy, and poetry for the K-12 segment. Income from rendering education services formed 96% of the total operating income which increased 54% to Rs 64.5 crore in FY24.

The rest of the income comes from the platform and cancellation fees. It also added Rs 1.13 crore from interest and liability written back which tallied its overall revenue to Rs 68.4 crore in FY24, compared to Rs 43.5 crore in FY23.

Similar to the other edtech companies, its employee benefits accounted for 50% of the overall expenditure. The company managed to curb these costs by 25% to Rs 47 crore in FY24 from Rs 63 crore in FY23. This includes Rs 3.5 crore as ESOP cost (non-cash).

The teacher's salary and marketing cum branding costs were controlled by 59% and 38% to Rs 11 crore and Rs 18 crore respectively in FY24 from Rs 27 crore and Rs 29 crore in FY23. Its legal, traveling, communication, and server pushed the total expenditure to Rs 95 crore in FY24 from Rs 133 crore in FY23.

See TheKredible for the detailed cost breakup.

The reduction in employee benefits, teacher's salary, and marketing along with the 60% growth in scale helped PlanetSpark to reduce its losses by 70% to Rs 26.6 crore in FY24, compared to Rs 89.5 crore in FY23. Its EBITDA margin improved to -35% while its expense-to-revenue ratio refined to Rs 1.42. At the end of FY24, the company has current assets of Rs 13.5 crore including cash and bank balances of Rs 7 crore.

PlanetSpark has raised over Rs 260 crore including debt-equity rounds and is currently valued at Rs 620 crore. According to the startup data intelligence platform TheKredible, Prime Venture Partners (Seabright) is the largest external stakeholder followed by FIITJEE. 

We believe it is too early to take a call on PlanetSpark’s business model, though there is no doubt that it faces a significant challenge. The services it offered are squarely aimed at the top segment of pupils, most of who study in schools that claim to offer some or most of these services as part of the overall ethos of the school. Though stand up comedy seems a bridge too far for most schools even today. 

One way out is for PlanetSpark to build a reputation strong enough to offer the services directly to schools. Or build a property that is respected enough to be aspirational, linked to some of the services it provides. But as we have seen, eventually, it is the study focused Olympiads that remain top of the heap when it comes to tests or abilities outside school environments. With the backing of schools in many cases. With the fresh funding, it will be an interesting ride to see how Planetsparks seeks to build a pathway for itself.