Education loan start-ups saw a sharp increase in their use case, especially during the fiscal year affected by Covid (FY21). While their size exploded in the last fiscal year with steep spikes in spending, some managed to grow with solid economics.
One such startup is Eduvanz from Mumbai.
Eduvanz, which provides student skills development loans, saw its operating income grow 203% to Rs 13.63 billion in FY21 from Rs 4.5 billion in the previous fiscal year, regulatory filings show.
Most of this income came from rebates and commissions earned of Rs 5.45 billion and Rs 4.52 billion, respectively. The startup also raised Rs. 2.01 billion and Rs.1.48 billion from processing fees and interest on loan disbursements.
Eduvanz gives loans to students to finance their school, coaching and exam preparation fees. Employees and the self-employed can also take out loans from her to finance their training costs.
However, the increase in company size in FY21 was accompanied by an increase in costs. Eduvanz’s total spending increased 94% in FY21 to Rs 24.82 billion from Rs 12.82 billion last fiscal year. The expenses for employee benefits accounted for 50% of the total expenses. These costs increased 82% to Rs 12.5 billion in FY21 from Rs 6.88 billion in FY20.
Financing costs also increased 237% to Rs 5.93 billion in FY21 compared to Rs 1.76 billion in FY20. In addition, the company’s legal and legal fees increased 40% to Rs 1.36 billion in FY21 from 0.97 billion in the previous fiscal year.
During the reporting period, Eduvanz saw its losses increase slightly, increasing 29% to Rs 10.44 billion in F21 from Rs 8.11 billion in FY20. At the unit level, the company spent 1.82 rupees on a single unit of operating revenue.
The startup’s cash outflow was Rs 11.92 billion in FY21 compared to Rs 25.96 billion in the previous fiscal year.
Backed by the likes of Sequoia, InCred Financial Services, Vivriti Capital, and Northern Arc Capital, the company claims to have paid out around Rs 400 billion in loans across a range of categories including training and school tuition funding.
Eduvanz has raised over $ 30 million through equity and debt rounds to date. Important, 50% of the total proceeds was raised by the company in FY21. Corresponding TrickypediaIt is estimated that Eduvanz was valued at approximately $ 70 million during the Serie B round this August.
Eduvanz competes with Mpower Financing, Credenc (spell checking), and Propelld.