How Ruangguru trimmed the fat and achieved profitability for the first time

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Hello readers,

A couple of newsletters back, I wrote about how online rewards platform Fave turned its financials around by cutting costs. That appears to be a viable method of success, as today’s premium story is about Indonesian edtech firm Ruangguru and how it grew its revenue by 4x and achieved profitability by slashing advertising and marketing expenses.

Maybe that’s a sign for me to cut down on my food intake so that I can finally start losing some weight…

Today, we look at:

• Ruangguru’s rise during the pandemic
• Digital assets firm Xfers hits S$2 billion in transactions this year and refreshes its platform
• Other newsy highlights, such as Ant Group continuing its government-mandated restructuring and a traveltech startup raising over US$5 million in its series A round

PREMIUM SUMMARY

Ruangguru’s turnaround story

Edtech has been one of the big winners amid Covid-19, and Ruangguru is no exception. The Jakarta-based firm recorded over US$63 million in revenue last year – an almost fourfold increase compared to 2019. In doing so, Ruangguru has also achieved its first profitable financial year since its inception.

• What a comeback: The company turned a US$31.9 million operating loss in 2019 into a US$1.8 million operating profit in 2020.
• Getting lean: This change can be largely attributed to how Ruangguru cut down its advertising and marketing expenses by 16% in 2020 to US$23.6 million. The result: The company improved its marketing-to-revenue ratio from almost 200% in 2019 to only 46% in 2020.
• Choosing not to evolve: Ruangguru’s current valuation has exceeded US$800 million, and another fundraise will make it a unicorn. However, a source familiar with the company says that it has no concrete plans to raise more funding soon because it has achieved profitability, and the money from the previous round hasn’t been fully used up.

Read more: Ruangguru becomes profitable, revenue grows by 4x

STARTUP SPOTLIGHT

Would an X-man use Xfers?

StraitsX, a payment service for digital assets developed by Singapore-based Xfers, has launched a refreshed platform as it hits the S$2 billion (roughly US$1.5 billion) mark in transactions for this year alone.

How the pandemic has changed our love for working overseas