COMPANY OVERVIEW
Your company is a professional upskilling and career services edtech platform which caters primarily to senior & mid-career professionals, and in some cases to young professionals as well. Your company offers a comprehensive range of professional upskilling courses and training programs which includes Law, Finance, Accounting, Corporate Governance, Compliance, Human Resources, Business Consulting, Artificial Intelligence, Content Writing, Video Editing, and Data Science through three distinct brands LawSikho, Skill Arbitrage and Dataisgood. These educational offerings are designed to help busy professionals to learn high demand skills, develop a strong demonstrable track record & access international as well as domestic freelance work opportunities and remote jobs. We also cater to college students looking for advanced skills and recent graduates who are struggling to find jobs.
One of our major focus areas is to offer upskilling courses which enable our learners to find career opportunities in the international market remotely. Some of the popular courses cover subjects like US Intellectual Property Law, US Tax Law, US Accounting, Bookkeeping and Corporate Compliances, International Contract Drafting, International Business Law, International Labour Laws, US Technology Law, US Corporate Law, US Real Estate Law etc.
Further your Company also provides international bar exam courses for Canada, United Kingdom and California, United States.
The Company also has a high performing test prep vertical which prepares students for highly competitive exams such as judiciary exams, UGC-NET, SEBI Grade A legal officer, Bank and Insurance Officers exams etc.
OUTLOOK ON THE INDIAN ECONOMY
Indias economic growthtrajectory has garnered global attention as the renowned rating agency S&P Global has revised its outlook on the country from stable to positive . This development reflects the agencys assessment that policy stability, deepening economic reforms, and robust infrastructure investment will sustain Indias long-term prospects. Additionally, the International Monetary Fund (IMF) in itslatest‘World Economic Outlook’ reportupgraded Indias gross domestic product (GDP) in FY 2024-25 by 20 basis points to7 percent. The IMF has revised its forecast upward from the previous estimate of6.8 percent in April owing to notable rise in consumption prospects, especially in rural areas. Whereas theUnited Nations Projection (World Economic Prospects, mid-2024)has projected the Indian economy to grow by6.9% in 2024 and 6.6% in 2025. This6.9%growth forecast for 2024 is an upward revision from the earlier 6.2% projection made in January 2024.
The Indian economys growth is driven by several key factors which include strong domestic demand, fueled by rising incomes and an expanding middle class, which has led to robust private consumption. Investment activity is also on the rise, with significant private investments and government expenditure on infrastructure. Moderating inflation has created a stable environment for spending and investment.
Additionally, manufacturing is seeing a resurgence due to initiatives like "Make in India," while the resilient services sector continues to thrive. Indias ability to withstand headwinds and diversify supply chains further bolsters its economic growth trajectory. However, there is a need for targeted economic policies to shape Indias trajectory toward achieving its aspirations of being the third-largesteconomy by 2027 and securing sustainable economic growth.
From the perspective of our business, 3 forces deserve mention:
1. The Indian economy has been undergoing rapid formalisation since the pandemic and the introduction of UPI. This is leading to a huge domestic demand for services talent across different professional categories as formalised businesses focus on scaling up, hiring employees, marketing, raising investment, bank loans, protecting their brand, enforcing contracts, and paying taxes. Our brands provide upskilling programs in several of these segments. Informal businesses which were primarily cash-oriented did not focus on this. Record direct and indirect tax generation by the government, and multiple reports of State Bank of India have indicated extensive formalisation of the Indian economy.
2. Apart from economic growth, the average per capita income of Indians is expected to reach USD 6000 by 2030, from approx. USD 2500 currently. Indians already spend a huge amount on education and upskilling. This increase in per capita income is likely to increase the paying capacity of Indians for upskilling, giving us more headroom to increase average revenue per user in the future for Indian learners.
3. As per Services Exports Promotion Council, services exports from India can hit 1 trillion dollars by 2030. It is already somewhere between 250-300 bn dollars currently, but is led by IT-related services provided through IT services offshoring companies.
Post the pandemic and remote work revolution, it has become possible to export services from India directly to SMEs in the US and advanced economies without the requirement of an intermediary. LawSikho and Skill Arbitrage have been upskilling talent in this area and support our learners to find opportunities in this space. There is a massive growth trajectory ahead given the possibility of increase in services exports.
OUTLOOK ON UPSKILLING INDUSTRY
The Government’s focus on skilling and employment for 2024-25 is visible through the allocation of Rs.1.48 lakh crores for employment and skilling in the budget for the year 2024-25. It also shows the focus on skilling with an intention to generate employment opportunities, something which your Company has been focussing on, since its early days. 1
The Government revamped the Model Skill Loan Scheme, increasing the loan limit from Rs.1.5 lakhs to Rs.7.5 lakhs. Since the courses offered by us are on-boarded on Skill India Digital Hub Platform, learners enrolling in our courses will get the benefit of the revamped scheme. 2 There is focus on upskilling as compared to education. A report from Great Learning reflects that 85% Indians believe that upskilling is necessary to future proof their career. IT, education and training are the sectors with maximum demand for upskilling. 3
Through SkillArbitrage, the Company has already introduced courses in the domain of data science and AI and is looking to expand into other domains with higher upskilling demands.
Further, in skilling, certain trends like personalised learning and microlearning are picking up.4 The Company had identified these trends early on and already has systems in place providing personalised coaching and training to learners. The Company is also in progress with creating a microlearning app for the learners.
1
https://razorpay.com/learn/budget-2024-education-employment-skilling-highlights/#:~:text=To%20sum %20it%20up%2C%20the,over%20the%20next%20five%20years .
2
https://www.drishtiias.com/daily-updates/daily-news-analysis/revamped-model-skill-loan-scheme 3 https://www.mygreatlearning.com/blog/upskilling-trends-in-india/ 4 https://www.schneideit.com/blogs/future-of-edtech-sector-in-india/The Company also picked up on the forthcoming trends of training in the domains of Artificial Intelligence (AI) and has accordingly developed courses which cater to various learners desiring to use AI for business growth and courses on prompt engineering and helping women to secure work opportunities.
STRENGTHS, WEAKNESSES, OPPORTUNITIES, AND RISKS IN ED-TECH SKILLING INDUSTRY
Strengths
Remote Operations:
The Company operates as a 100% remote company which gives the Company access to talent from Tier-2 and Tier-3 cities and also from other countries, at a lower cost. The Company particularly has an advantage in hiring work-from-home mothers who are talented and want to contribute to the organisation but cannot commute to office. Having figured out remote working gives a distinct advantage to the Company.
Brand name:
The Company’s brand "LawSikho" is well known and in addition, the listing of shares of the Company has created further awareness of the brand of the Company, thus gaining trust from potential customers and employees. SkillArbitrage has also become a renowned brand in a short time.
Strong placement numbers:
The Company has significantly developed its ability to place its learners in jobs and internships and to generate freelancing opportunities for the learners. This has helped the Company create a good number of success stories and gain an edge from other competitors, who are not able to generate work opportunities at the same scale or velocity for their learners.
Weaknesses
Smaller sales team:
Our sales team has been smaller compared to other edtech companies and some of our potential competitors. It will be important for us to significantly scale up our sales team if are to effectively capitalise on the opportunities before us.
Rapidly changing work force requirements:
Since we connect our courses and value proposition for users with employment and market demand, changing dynamics at workplaces and economy can significantly impact us. We have to stay in touch with evolving needs of the industries we cater to, and failing to notice or respond to new trends can lead to significant loss in market share very rapidly.
Technology and connectivity:
Remote operations require availability of continuous connectivity which may not be available at all times and this may impact the functioning of the Company. We are vulnerable to events that can disrupt internet and mobile connectivity. Further, this requires the Company to continuously have in place and implement systems which can help to monitor the performance of the employees. Monitoring and metrics driven approach can cause dissatisfaction amongst the workforce.
Dependence on consumer loans for revenue generation:
Close to 50% of our learners opt for EMI schemes, leading to dependance on NBFC partners who provide loans for online courses. Changes in RBI policies or banking regulations can affect our business if such loans become harder to obtain. Also, in case in the future there happens to be a large number of defaults by our learners, our future learners could find it harder to get these loans.
Opportunities
We can aggregate service and demand side for services export
Services export from India on the back of labour cost arbitrage has been a very successful business model. However, white collar SME jobs in developed countries were mostly untouched by that trend. SMEs are now open to remote workers due to huge cost savings and an increasingly competitive business environment. We have an opportunity to rapidly grow the services export part of our business as well as aggregate demand and supply in niche online marketplaces. As we already train a large number of service providers across various categories, we have a great opportunity to emerge as a major global player in a nascent market due to our significant competitive advantages.
Dedicated sales teams focusing on US and UK services export
We can significantly grow our revenue with dedicated teams for US and UK markets where we have achieved some penetration already. We would grow our inside sales teams as well as B2B business development teams focused on generating from SMEs in these countries.
Opportunities for geographical expansion:
The Company is seeking to expand its reach to learners in other countries such as the United Kingdom, North America and Canada. There are also significant opportunities in the EU, Mexico, Kenya, Nigeria, The Philippines and other countries. For this purpose the company is exploring establishment of franchisee relationships or entities in these regions and is also looking for acquisition targets to access these markets.
Threats
Competition
The Company operates in a competitive environment where there are low entry barriers. Our continued success depends on the success of our learners. In some verticals we compete against existing players while in others there is a blue ocean. However, it is possible for competition to enter the market as other players can offer similar courses and learning mechanisms. What has continued to set us apart is our focus on the success of our learners and offering deeper levels of placement support to our learners. If we fail to scale the number of opportunities we provide to our learners while we increase enrollment in our courses, that would lead to a lot of dissatisfaction from learners which can hurt our brand. Further, the Company continues to face competition from traditional modes of learning such as offline learning centres and colleges who intend to get into the upskilling space.
Ability to attract and retain talented personnel
The business model of the Company is dependent on its ability to attract and retain talented people. Although the remote operations and a brand name as a listed company gives the Company an edge, any factors leading to unavailability of appropriate personnel or inability to retain personnel can impact the business of the Company.
Computer-driven and intellectual property based systems
The Company relies heavily on intellectual property and technology based systems, such as learning management systems, AI driven evaluation systems etc., for majority of the functions and operations. Numerous software tools are used by various functions in the Company for different purposes. Such systems can be subject to technological errors, data breaches, infringement by third parties or claims that the Company is infringing their intellectual property. Any of these instances can impact the operations of the Company.
SEGMENT WISE OR PRODUCT-WISE PERFORMANCE
Under the brand "LawSikho," our company offers a diverse range of courses aimed at providing comprehensive legal upskilling and practical skills as well as for those aspiring to build careers in the international legal arena. These courses encompass various aspects of law and are designed to cater to different career aspirations and legal specialisations. During the financial year 2023-24 the revenue generated from these courses was Rs.37,69,90,544.
Under our brand "Skill Arbitrage", we offer a diverse range of professional upskilling courses in the field of finance, human resources, artificial intelligence, content writing, video etc. designed to cater individuals from various backgrounds to excel in their careers and seize international opportunities. During the financial year 2023-24 the revenue generated from these courses was Rs.21,09,46,590.
Under our brand "Dataisgood", we provide data science and analytics courses to learners. During the financial year 2023-24, after the acquisition of Dataisgood Edutech Limited, the revenue generated from these courses was Rs.4,58,22,079.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
Our company has put in place standard operating procedures that ensure effective and transparent internal controls for efficient delivery of services. The Audit Committee Board oversees the internal audit function. The internal audit function provides assurance the Board that a system of internal control is designed and deployed to manage key business risks and is operating effectively. We have been refining our management methodologies by way of periodical reviews so as to realign our tactics to meet the changes on the ground. The Company has adopted policies and procedures for ensuring orderly and efficient conduct of the business, including adherence to the Company’s policies, safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable disclosures. The internal control system is commensurate with the nature of business, size and complexity of operations and has been designed to provide reasonable assurance on the achievement of objectives, effectiveness and efficiency of operations, reliability financial reporting and compliance with applicable laws and regulations. Financial is emphasised at all levels of the business and adherence to quality systems and focus on customer satisfaction is critical for the Company to retain and attract customers business and these are followed rigorously.
SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS
RATIO |
FY 2024 |
FY 2023 |
CHANGE % |
REASON FOR CHANGE |
||||
Current Ratio |
5.15 |
1.26 |
309% |
The Company was listed on the Emerge Platform of the National Stock Exchange in Q4 of 2023-24. Accordingly the deposit of the IPO proceeds in bank accounts caused an increase in current ratio |
||||
Trade receivable turnover ratio |
135.48 |
1384.24 |
-90% |
The Company’s trade receivables are majorly the amounts due from payment aggregators which take 48-72 hours to get credited in our account. The amount outstanding with such payment aggregators increased for FY 2024 by Rs. 45 Lakhs which led to decrease in Trade receivable turnover ratio |
||||
Debt-equity ratio |
0.00 |
0.08 |
-100% |
The short term borrowing of Rs 15.73 lakhs was paid off during the financial year FY 2024. Thus, the company had no outstanding debt at year end of FY 2024. |
||||
Net Profit Margin (%) |
10% |
7% |
43% |
Companys year on year revenue has increased by 90%. The increase in cost was not in the same proportion, which led to an increase in the net profit margin. |
||||
Operating Profit Margin (%) |
19.6% |
9.97% |
97% |
Companys year on year revenue has increased by 90%. The increase in cost was not in same proportion, which led to an increase in the operating profit margin |
||||
Interest coverage ratio |
- |
- |
- |
Since there are no significant borrowings from banks or financial institutions, this ratio not required to be calculated. |
||||
Inventory turnover ratio |
- |
- |
- |
The Company is an e-learning and skilling platform and therefore this ratio does not apply to the Company’s business. |
||||
MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED
As a professional upskilling and education technology company, we believe that a motivated and empowered employee base is the key to our operations and business strategy. We have developed a large pool of skilled and experienced personnel including sales, marketing, HR, teachers, counsellors, etc. Up to 31st August 2024 we had 82 full-time employees. Given that many team members are lawyers, CA, CS and other professionals with special rules with respect to employment, we engage most team members on a project-basis. As on 31st
August 2024, we have engaged 663 (Six Hundred and Sixty-three) consultants who are engaged on a consultancy or project basis, in the day-to-day business operations, administrative, legal and accounting functions in accordance with their respective designated assignments.
Our employees are not unionised, and our operations have not been interrupted by any work stoppage, strike, demonstration or other labour or any disturbance in the past.
DEPARTMENT WISE EMPLOYEES BREAK-UP:
| Sr. NoParticulars | Number of employees | |
| 1 | Management | 3 |
| 2 | Finance and Accounts | 4 |
| 3 | Human Resources | 4 |
| 4 | Marketing and Sales | 36 |
| 5 | Content team (including Test prep, Blog) | 13 |
| 6 | Operations & Support | 13 |
| 7 | Secretarial | 1 |
| 8 | Placement | 4 |
| 9 | Tech | 4 |
| 10 | Legal | 0 |
| 11 | Admin | 0 |
| Total | 82 | |
DEPARTMENT WISE PROFESSIONAL BREAK-UP :
| Sr. NoParticulars | Number of consultants | |
| 1 | Finance and Accounts | 12 |
| 2 | Human Resources | 13 |
| 3 | Marketing and Sales | 248 |
| 4 | Content team (including Test prep, Blog) | 199 |
| 5 | Operations & Business Excellence, Support, cric | 56 |
| 6 | Secretarial | 1 |
| 7 | Placement | 80 |
| 8 | Tech | 34 |
| 9 | Legal | 1 |
| 10 | Executive office (including Admin) | 19 |
| Total | 663 |
FORTHCOMING TECH INITIATIVES
We have been consistently aiming to improve learner experience through various technology initiatives. Some of these initiatives which are currently in place and also being developed by the technology department of the Company are as follows:
LawSikho opportunities
- What this platform will This is a user-friendly platform which provides job do: opportunities to lawyers and a seamless application process. It will also help employers to find a reliable pool of qualified legal professionals and advanced filtering and matching mechanisms to curate job listings.
- How will this benefit theusers: The users will be able to search for jobs and apply with ease. We can potentially explore bundling upskilling services to users who can upskill themselves and apply for opportunities.
- Revenue generation for the Company: The Company will charge a platform service fee for facilitating interactions between potential employers and applicants.
Services Marketplace
- What this platformwilldo: This platform will provide an opportunity to our learners to showcase their services and apply for assignments posted by SMEs especially in the US and advanced economies in a similar manner as Upwork or other freelancing platforms. The platform is intended to be designed to address common concerns of employers with respect to client confidentiality, etc. which currently are not adequately by existing platforms. It will also be customised for the categories of work specifically catered to by our learners. The platform will enable learners to register and create detailed profiles, showcase their portfolio and work done, apply for jobs and assignments and receive payments in a secured manner with escrow mechanisms. It will also enable potential employers and clients to search for appropriate service providers.
- How will this benefit theusers: Currently, our learners rely on finding work through opportunities sourced by our team or through existing freelance platforms. Building a platform that protects the concerns around data security, freelancer accountability and workflow management of potential clients in the US and advanced economies while giving work to talent across borders will reduce friction, thus enabling more opportunities to be accessible for our learners. The services marketplace will complement our inside sales development initiative to generate opportunities for
Indian talent, including our learners, from advanced economies. This will also deepen the competitive advantage for our upskilling business. It is also possible to monetise transactions on this marketplace as US SMEs are already accustomed to paying freelance platforms like Upwork, Fiverr, etc.
- Revenue generation for the Company: The Company will charge a platform service fee for facilitating the business and service providers.
Microlearning App
- What this application will do and how it willbenefitusers: This application will be a valuable educational application ("app") which can increase the Companys visibility and reputation in the field of legal education. The quality of legal education greatly varies across colleges all over the country. Through this app, law students will be able to access the entire college curriculum on their mobile phone through byte-sized learning (like Duolingo and Sololearn), goal-setting and gamification. The app will support lead generation, data-driven marketing, and provision of premium content or services.
- Revenue generation & other benefits for Since the app will aid the Company: lead generation and data-driven marketing, this will aid revenue generation and drive down cost of customer acquisition. Further, it can become a direct source of revenue for the Company through provision of premium content and services.
Improving Our Existing Student Experience Portal
- What this portal willdo: This portal will be a single portal which will integrate data across multiple tools and provide learners a single window access to all crucial aspects of their academic journey and career development with us. The portal shall be available to all learners, including those with disabilities, by adhering accessibility standards. The portal will also have robust data security measures to protect sensitive student information and ensure compliance with data privacy regulations
- How will this benefit the This portal will enable us to harness efficiency in users: service delivery, save time of our delivery time and also give our students a more focussed experience, enhanced goal-setting, greater customer delight and stickiness to our platform.
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