Edtech startup Vedantu turns profitable in Q4FY25 as collections rise 67% to Rs 90 crore

Bengaluru-based edtech startup Vedantu has reported its first profitable quarter in Q4FY25, driven by a 67% year-on-year surge in collections to Rs 90 crore. Co-founder and CEO Vamsi Krishna announced the milestone on Thursday, noting the company generated over Rs 6 crore in free cash flow (FCF) during the quarter.

"Q4 was our strongest quarter ever... and this wasn't even our peak quarter, which puts us on a clear trajectory for a cash flow-positive FY26," Krishna said in a LinkedIn post following the company's board meeting.

Vedantu ended the fiscal year with Rs 284 crore in total collections, up 55% from the previous year. The company also cut its annual cash burn by 30% to Rs 70 crore. Its online business grew 33% in FY25, with growth accelerating to 70% year-on-year in the last two quarters, Krishna said, countering prevailing narratives that K12 edtech has lost steam in the post-COVID era.

Vedantu's offerings

Founded in 2011 by Krishna, Anand Prakash, Saurabh Saxena, and Pulkit Jain, Vedantu offers online tutoring services for school students and became a unicorn in 2021 after raising $100 million from Temasek-backed ABC World Asia. Over the past two years, the edtech firm has diversified into offline learning by opening coaching centres in several cities.

Vedantu's turnaround comes after a turbulent FY22, when it reported a net loss of Rs 696 crore. The following year, in FY23, the company managed to significantly reduce its losses by 46.4%, bringing them down to Rs 373 crore. 

In FY24, Vedantu again narrowed losses by 58% to Rs 157 crore while growing revenue by 21% to Rs 185 crore. Its FY25 financials are yet to be filed with the Registrar of Companies.

The company's quarterly profitability is a rare bright spot in India's edtech sector, which has struggled with post-pandemic slowdowns, mass layoffs, and declining valuations. Byju's, which was once a market leader in the edtech segment, has been embroiled in governance crises, further souring investor sentiment.

However, Krishna argued that the broader outlook on edtech—especially K12—has been unduly negative. "Yes, FY23 saw a dip from FY22, but if you zoom out, we've seen an 10X growth in 5 years – a ~50%+ annual compounding rate, with dramatically reduced burn. We're already profitable from a run-rate perspective," he wrote.

"The demand for quality K12 education remains strong. Parents want the best for their children, and that fuels our sector."

He added that Vedantu's online business remains central to its strategy. "Offline has provided a boost, but online is thriving," he said, challenging the notion that the K12 edtech model is obsolete.

India's edtech sector has seen some signs of recovery, with funding nearly tripling in 2024 to $608 million from $207 million in 2023, though still far below the $2.1 billion peak in 2022, according to data from Venture Intelligence. Krishna believes the market remains ripe for companies focused on outcomes, sustainability, and strong execution.

"Companies that prioritise student outcomes will build enduring franchises. And right now, this sector is undervalued, making it a prime opportunity for builders and investors," he wrote.