BENGALURU :Eruditus, founded in 2010 by Chaitanya Kalipatnapu and Ashwin Damera and headquartered in Singapore, is evaluating if it would be feasible for the executive education startup to move its base to India to capitalise on growing opportunities in the market.
“It is a fact that the Indian stock markets are far more attractive than the global peers,” said Damera in an interview with Mint.
“Sometime in the future we will have to figure out how to give an exit to the investors. It could be a sale, a larger PE fund buys them out, or it could be an initial public offering. In that scheme of things, we have starting the process of evaluating what a reverse flip to India looks like and if it is even feasible for us,” Damera said.
Reserve flip refers to an Indian company moving its headquarters from overseas to domicile in India. Economic Times reported earlier on Monday citing sources that Eruditus was considering a shift in domicile from Singapore to India.
Multiple startups incorporated overseas have been considering a move back to India to take advantage of the Indian markets, but such a decision would be accompanied by high tax implications. PhonePe’s investors ended up paying $1 billion in taxes after the company switched its domicile to India.
On Monday, Eruditus, which is operated by Singapore-based Eruditus Learning Solutions Pte Ltd, reported a 70% increase in revenue to ₹3,343 crore for FY23, even as it managed to shrink its losses by 66% to ₹1,049 crore.
Currently, about 80% of Eruditus’ revenue comes from overseas markets, but its India revenue has been rising.
India’s contribution to the revenue of the ed-tech unicorn will increase from 20% to 33% in the next three years, said Damera.
“We started working with some Indian universities only in 2019, but India is a fast-growing segment for us. India was about less than 10% three years ago and now it’s about 20%. Maybe in the next three years, it will be about a third of our operations,” said Damera.
Eruditus had seen greater growth in its enterprise, or business-to-business, segment. “B2B has grown the fastest, (it) has seen 100% year-on-year growth, while the overall company has grown 70%,” said Damera.
For FY24, Damera said he expects the company’s revenue to grow by about 40% to about ₹4,200 crore.
He also expects the company to be profitable on a full-year basis in the current fiscal year. Eruditus follows a June-July financial year. Mint reported in May 2023 that the company expected to break even in June 2023.
On fundraising, Damera said the company doesn’t “need to raise primary capital in a hurry. The company is doing well so investors are not scrambling.”
Eruditus offers management education programs including short courses, degree programs, professional certificates, and senior executive programs in collaboration with universities in the United States, Europe, Latin America, Southeast Asia, India, and China.
On the market in India for such courses, Damera said demand is much larger in India but the ability to pay is lower.
He also noted that online education in the US is far more evolved than in India. “It’s during Covid that the government in India started pushing for online education and institutions have also realised that they need to up their technology versus in the US, where they have been teaching online for 10-15 years,” he said.
“In India, there is no system of paying royalty to faculty, which becomes a challenge. Most of the online (education) that happens in India is faculty teaching live instead of recorded lectures, so faculty gets compensated per hour. We record lectures in the US, and for case studies and some projects, the faculty comes live,” he said.
Several edtech companies in India have gone the traditional route, conducting classes in person in addition to online courses to be able to attract more students. Damera said Eruditus will look at offline from a distribution perspective to reach more students. “From a product perspective, we are open to doing online, but in some cases also blended programs where you do online and one or two offline classes.”
Eruditus may also expand beyond its core executive education focus, he said.
“There are 20,000 universities in the world and we are working with about 80, so there is a large room to grow,” Damera said.
“Today our core business is working professionals, we don’t have anything for students who are undergraduates or graduates. We are hoping to launch a study-abroad segment this year,” he said. “AI has become very big, so we are looking to introduce more courses in our portfolio and work more with Indian institutions, helping them go online faster.”
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Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.
