Testbook’s scale grew nearly 2X in FY21
                     Iron Pillar-backed Testbook’s scale 
grew nearly 2X in FY21
The edtech space has been hyperactive in the past two years. About 185 startups in the space have 
raised over $7 billion since 2021 with several early movers raising back to back rounds at staggering 
valuations. However,  the  segment  got  a  reality  check  in  recent  months  with  mass  layoffs  and  
some  early  stage startups going under.
While it has been rare to see a VC-backed edtech company that didn’t raise capital in the past two 
years, Mumbai-based Testbook is an exception as it chose not to raise money after February 2020 and 
grow on its own terms. The company is yet to file its annual financial statement for FY22 but it 
managed to grow at a fast pace in FY21.
Testbook’s  revenue  from  operations  surged  85.8%  to  Rs  22.3  crore  in  FY21  from  Rs  12  crore  
in  the previous fiscal year (FY20), as per its annual financial statements filed with the Registrar of 
Companies (RoC).
Founded in 2014, Testbook helps students from smaller cities prepare for government exams through 
live classes, mock tests and quizzes. Till date, it has raised around $13 million from Iron Pillar, Matrix 
and a clutch of angel investors. The firm primarily makes its money from selling online courses and 
mock test papers which soared 85.8% to Rs 22.3 crore in FY21 from Rs 12 crore in previous fiscal year 
(FY20).
The company’s non-operating revenue (interest income) jumped 2.9X to Rs 2.51 crore in FY21 from 
Rs 86 lakh in FY20.
In line with revenues, Testbook’s total expenses jumped 2X to Rs 58.4 crore in FY21 as against Rs 
29.05 crore in FY20. It spent 37.2% of the total cost on employee benefits which formed the largest cost 
center for the company, rising by 91% to Rs 21.73 crore in FY21.
Advertisement and promotions make up 29% of the cost and shot up 4.2X to Rs 16.91 crore in FY21 
from Rs 4.02 crore in FY20. IT along with live streaming costs grew 71.2% to Rs 4.88 crore in F21 
from Rs
2.85 crore in the previous fiscal year (FY20).
With a 2X jump in expenses, the company’s cash outflows grew 6.4X to Rs 10.60 crore in FY21 from 
Rs
1.65 crore in FY20. Losses consequently kept pace with revenue, jumping 2X to Rs 32.5 crore in 
FY21 from Rs 15.3 crore in FY20. On a unit level, the company spent Rs 2.62 to earn a single unit of 
operating revenue.
With  its  focus  on  government  exams  (jobs).  Testbook  needs  to  maintain  a  very  diversified  roster 
 of teachers  and  trainers,  even  as  it  targets  smaller  cities.  Thus,  with  its  focus  on  set  syllabi,  
patterns  and testing, the lower costs of training possibly are matched by the increasing complexity of 
demand across the country, in terms of multiple languages etc. It will have to be wary of the brand being 
seen to be good for only one type  of exam,  even  as competition is intense for the  more  prestigious  
options like  UPSC entrance. It’s a tough balancing act, and getting it right, even while improving its 
margins, will be the key to surviving and even thriving in the market.