How Imarticus Learning Defied Edtech Slowdown To Reach INR 750 Cr IPO Summit

Imarticus Learning is set to step into the public market with an initial public offering (IPO) looking to raise around INR 750 Cr in a combination of fresh issue and offer for sale of existing shares.

The Mumbai-based edtech company has appointed investment bank IIFL to manage the IPO. “We have set the timeline of filing DRHP in the next 4-5 months,” founder and CEO Nikhil Barshikhar told Inc42 in an interaction.

Imarticus Learning is looking likely to become the second Indian edtech startup to hit the public markets after Westbridge Capital-backed Physics Wallah, which filed for an INR 4,500 Cr IPO two weeks ago through the confidential filing route.

These two IPOs could herald a turnaround in the edtech sector, which has suffered from all manner of downturn and decline since 2021, with dozens of startups shutting shops, and the collapse of BYJU’S.

Despite the downturn in the industry, Imarticus Learning managed to stay profitable for the last 7-8 years, Barsikhar said. The former investment banker founded Imaricus Learning in 2012 and said the company has seen revenue growth between 20% and 30% year-on-year over the last few years.

Further, Imarticus claims to have has onboarded about 25,000 learners across its platform with courses in finance, digital marketing, data analytics, GenAI, business management, human resources among other areas. These are conducted in partnership with institutions such as IIT Roorkee and IIM Lucknow. It imparts training to individual learners as well as corporate employees.

Barshikar said Imarticus Learning has remained profitable even as the edtech sector grappled with severe headwinds, prompting most of its peers to scale down operations, and driving investors away from the vertical.

He also talked about the company’s road towards IPO and the winning strategy in the hyper-competitive upskilling business.

Here are excerpts from the interview…

Inc42: Let’s start with the financials. Will you please give an insight into Imarticus Learning’s numbers, especially in terms of revenues and EBITDA.

Nikhil Barshikhar: We are a bootstrapped company that has been profitable for the last 7-8 years. We have the credentials needed to head for an IPO which is why we are planning for the same.

Our revenues have jumped by 25% on-year to INR 205 Cr in FY25 and our EBITDA has grown by 100% in FY25. We are at a stage where we have predictable and profitable revenue. Earlier, we were an employment-focussed, finance-training company. Now we have multiple outcomes. Employment is one of the outcomes. Executive education is another, and so on and so forth.

This diversification is also a drift from finance. Finance makes up 40% of the revenue, while 30% comes from analytics, and the rest from management and HR courses. We’re diversified enough, we’re predictable enough, and we have been growing over the last 3-4 years profitably.

That gives us the scope to access the public market.

Inc42: Going ahead on the public issue, what sort of timelines have you set for yourselves? Also, what is the IPO size that Imarticus Learning is looking at?

Nikhil Barshikar: In terms of timeline, we’re looking to file the DRHP (draft red-herring prospectus) in the next 4-5 months. We have appointed IIFL as our banker for the IPO. Our entire team is all out on it now.

In terms of size, we are looking at an IPO of probably INR 750 Cr that would include a combination of primary and secondary share sales.

Inc42: When it comes to edtechs, there is a contrarian picture in the market. While the public market sees a bull run, there is a visible negative investor sentiment towards edtechs. How did you handle such a situation while timing your IPO?

Nikhil Barshikar: I personally have spoken to a lot of bankers gauging the sentiment of the public market. Retail and institutional investors are still looking for good, profitable companies to invest in.

And, if there are companies out there that can be profitable, or can grow over a period of three to four years and turn profitable, whether it’s edtech or education, if you have such a story, the market will not only accept but will also pay a premium for it.

The bankers are looking for a good story. Look at some of these sectors like jewellery. Who would have heard of people making money through jewellery IPOs?

In the last couple of years, they have done extremely well. Before that, you wouldn’t have told me one jewellery IPO that would have done well. So, if you have a good story, and have a company created through good process and CAC (customer acquisition cost), they will not only appreciate but pay a premium.

Inc42: Doesn’t being in edtech pose a challenge?

Nikhil Barshikar: Let’s take an example of an NBFC that is trying to go public and the metrics for valuation have been made. Now, in edtech, thankfully there is no benchmark. Should we then go by revenue or by EBIDTA multiples?

I personally believe if the company is good, you’ll get a premium in the first few offerings, after which there’ll be a set standard and then the people will follow the standard.

Inc42: Do you see a first-mover advantage for you or Physics Wallah?

Nikhil Barshikar: Yes, once the standards are set, then it’ll be with either of us.

Inc42: What kind of valuation are you looking at when it will list?

Nikhil Barshikar: What we’ve heard from our bankers is that it will be anywhere from 25 to 30 times that we should expect. It is a derivation of how good the market is at that particular point. If the market is good, we’ll get a better valuation.

My idea is not to maximise the valuation at the listing. I will use it as a currency. We’ve acquired four companies in the last four years. If I had public money, I would be able to acquire more. I want to use it as a way to get liquid currency to acquire more people. I’m less concerned about the valuation of the company.

Inc42: In terms of learners on the platform, what kind of growth have you seen in the past few years?

Nikhil Barshikar: I think the growth is about 25%-30% consistently. We have about 10,000 to 15,000 people on the platform on the B2C and another 10,000 on the B2B space. So, about 25,000 people use the platform on a yearly basis.

While B2C is for individual learners, B2B is where we train corporate employees.

Inc42: For many edtech companies, soaring customer acquisition costs (CAC) and overall cash burn have become a cause for concern. How do you handle this?

Nikhil Barshikar: What we did over the last three years is that we invested in non-digital CAC. What that means is a non-Google, non-Facebook advertising. So, now we have a team of about 200-250 people that goes to colleges and corporate parks. We have a referral engine that works.

About 50% of our revenue comes from non-Google, non-Facebook, non-digital customer acquisition costs. Non-digital customer acquisition is almost 40% of our digital marketing costs. Digital channels drive 30% of our revenue or customers.

Inc42: Your courses focus on leadership programmes in finance, accounting, HR, GenAI and other professional skills. Don’t you think this restricts the total addressable market in this segment?

Nikhil Barshikar: We are focussed on building a portfolio of products in each vertical that would offer courses for everyone – from beginners to leaders. Let’s take finance, for instance. If you want a job, we have a bootcamp for you for four to five months. We have a few types of bootcamps for finance certifications such as ACCA, CMA and CFA.

If you’re a graduate with 4-5 years of experience and you want to pursue investment banking with IIM Lucknow, then we have a course with that as well. Now that you’ve become a CFO, we have a CFO course with ISB. What I’m trying to say is that when we are building a portfolio after picking a domain, we go all the way from the level of a fresh graduate to the CXO level.

In our B2C business, nearly 50% revenue comes from early learners who are looking for a job, about 20% comes from certification, and executives with 4-10 years of experience make up the rest.

Inc42: The upskilling segment appears crowded in the edtech space. What is your differentiating factor?

Nikhil Barshikar: Indeed, the market is getting crowded. The market is only going after management-type courses. Accordingly, many players, including us, are offering similar courses. In fact, many of our peers are now tying up with Tier-I management colleges like IIMs.

Therefore, there is no differentiation factor, except pricing – who offers the courses at what price – and the quality of the programmes being offered.

There’s another issue we see in some of the IIMs. They do provide great teachers, but there remain some gaps between academics and industry insight. The platforms which the institutes tie up with can bring the industry expertise which can be blended with the academic domain of teachers. The platforms that can ensure the best industry support and expertise will win the game in the long run.

Inc42: GenAI is the order of the day. How much do you think AI integration has helped in bringing efficiency to the education industry or edtechs?

Nikhil Barshikar: We’ve started integrating AI into our learning management system. We’re using it for two major reasons for now. First, any out-of-class queries that you might have, can be taken care of by the AI agent or the AI bot. Whether you’re practising, whether you have a question, and so on and so forth. That’s integration.

The second place where we’re using it extremely well, again, is out-of-the-class. With the help of AI, we can personalise content based on assessments for you. Take a particular example of financial modelling. Let’s suppose you are bad at valuation. I’ll give you a test and based on that I’ll create a sort of course for you.

Inc42: We heard edtech leaders often saying that AI will replace human teachers at some point in a learner’s journey…

Nikhil Barshikar: Has it replaced the teacher? The answer is no.

Technology is all about making tasks simpler. And artificial intelligence is no exception. I think AI will only make learning better, smarter, and more accessible.

We’ll see what happens along the course. But never say never, right now, that’s how we are using it.

[Edited By Kumar Chatterjee]

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