Startup Deep Dive : Testbook — revenue jumped 140% but its earliest backers exited first

Testbook’s revenue climbed 140.2% to ₹136.7 crore ($14.2 million at $1≈₹96.0, 18 September 2026) in the year to March 2024, as per Inc42’s tracking of the government-exam prep company’s regulatory filings. That is the fastest expansion in its decade-plus run — but it arrived two years after Testbook’s own early backers decided they had waited long enough.

In September 2022, Matrix Partners India and Pivot Ventures sold their stake in Testbook for ₹67.80 crore. The buyer was not a fresh investor writing a primary cheque into the company; it was Classplus, a rival B2B edtech firm, and people close to the deal told Entrackr that Classplus could eventually “fold up Testbook completely” into its own business. A platform built to help India’s government-job aspirants clear an exam had itself become the asset under appraisal.

Quick facts

What Testbook actually sells

Testbook is an exam-preparation platform for India’s government-job and competitive-exam economy: it sells test series that mimic the real interface of the target exam, live coaching classes, recorded video lectures, study material and doubt-resolution support, bundled into paid subscriptions (Wikipedia; Tracxn). The company began as a single-exam tool and widened its net over a decade to cover most of the recruitment calendar that Indian graduates chase:

• Banking and insurance recruitment — SBI PO/Clerk, IBPS PO/Clerk (Wikipedia)
• Staff Selection Commission exams — SSC CGL and related SSC recruitment (Wikipedia)
• Railways recruitment (RRB) hiring cycles (Wikipedia)
• Civil services — UPSC IAS preparation (Wikipedia)
• State-level recruitment — state Public Service Commission (PSC) exams (Wikipedia)
• Engineering and teaching-track exams — GATE and teaching-recruitment tests (Wikipedia)

The company’s own account of its first users is narrower than that list suggests: it started in January 2014 with roughly 13,000 registered candidates preparing only for GATE, before adding banking and SSC test series through 2014 and 2015 and an Android app soon after (StartupTalky; Testbook company blog). By November 2017 it counted 25 lakh registered students and 60 crore questions solved on the platform; by September 2018 that had grown to 50 lakh registered users and six million app installs (Testbook company blog, company-stated).

The origin

Testbook was founded in January 2014 by six IIT alumni — Ashutosh Kumar, Narendra Agrawal, Praveen Agrawal, Manoj Munna, Yadvendar Champawat and Abhishek Sagar (Inc42; Wikipedia). Kumar, who grew up in Bihar and studied at IIT Bombay, had already taught physics to exam aspirants and run earlier small ventures before Testbook (Inc42). The founding bet was narrower than “put coaching online”: Kumar has said the team’s real insight was that simply digitising classroom content would not fix Indian test preparation, and that the experience itself — how a student practises, times and reviews a mock exam — needed to be rebuilt from scratch rather than filmed and uploaded (Inc42).

That insight mattered because of who the students actually were. Both Inc42’s reporting and Testbook’s own account of its history describe close to 70% of government-job aspirants as coming from Tier II, III and IV towns, a population the founders judged was underserved by Delhi- and Kota-centric coaching chains built around physical classrooms (Inc42; Testbook company blog, company-stated). Rather than opening classrooms across small-town India, the founders chose a test-and-analytics product they could ship over a low-bandwidth Android app — a decision that shaped the rest of the company’s struggles with a user base that could not always afford the device or the bandwidth their product assumed.

The struggle years

The gap between Testbook’s product and its market showed up almost immediately, and the company’s own telling of its history does not soften it. By its own account, close to 80% of the students preparing for government exams could not afford a computer, which undercut a platform designed to be taken on one (Testbook company blog, company-stated). Two fixes followed, both dated and both costly: in March 2016 the company launched “Testbook Pass”, a voucher card that let students without digital payment access pay in cash at local shops, and around the same period it opened branded computer labs so that students without their own hardware could sit tests on-site — the first such centre, in Patna, reportedly built a 250-student waiting list within three months (Testbook company blog, company-stated).

The costlier struggle came later, and it is independently documented rather than self-reported. Testbook raised its Series B of ₹60 crore ($8.3 million) in January 2020, led by Iron Pillar with Matrix Partners India also participating (Inc42; Wikipedia; StartupTalky). No primary round followed it for roughly two and a half years, even as losses kept widening: from ₹32.5 crore in FY21 to ₹46.9 crore in FY22, against operating revenue of just ₹35.3 crore that year (Entrackr, March 2023 and June 2022). By the end of FY22, Testbook’s cash and bank balances had contracted by roughly 60% to just ₹4 crore (Entrackr, March 2023) — a company burning tens of crores a year with barely a month’s worth of costs sitting in the bank, and no fresh primary capital in sight.

The turning point

The resolution, when it came in September 2022, was not the funding round a cash-strapped startup usually needs. Classplus, a Noida-based B2B edtech company, paid ₹67.80 crore to buy out Matrix Partners India and Pivot Ventures’ holding in Testbook — 7,867 shares, settled by allotting Series E preference shares in Classplus itself to the two exiting investors rather than putting new money directly into Testbook’s balance sheet (Entrackr, September 2022; YourStory, September 2022). Matrix had held roughly 34% of Testbook going into the deal (Entrackr).

The numbers either side of that transaction are stark. Before it: two and a half years without a primary round, a FY22 net loss of ₹46.9 crore, and cash reserves down to about ₹4 crore (Entrackr). After it: two of Testbook’s earliest institutional backers were gone, Classplus was in as a strategic shareholder, and sources told Entrackr that Classplus would “evaluate” buying more of the company and could “put some primary capital in Testbook in the coming months” — with the explicit possibility, per the same report, of eventually folding Testbook into Classplus altogether. Even so, Testbook’s FY23 net loss then widened sharply to ₹129.8 crore on revenue of ₹56.9 crore (Inc42, October 2023), before narrowing to ₹84.9 crore in FY24 as revenue more than doubled to ₹136.7 crore (Inc42) — the turnaround the ownership change was meant to buy time for.

The money behind it

• Seed, October 2014: $250,000 from LetsVenture and other angel backers (Inc42)
• Pre-Series A, February 2016: undisclosed amount from S. Chand & Company, the listed education-publishing group (Inc42; Wikipedia)
• Series A, April 2017: $4.00 million led by Matrix Partners India, now rebranded Z47 (Inc42; StartupTalky)
• Series B, January 2020: ₹60 crore ($8.3 million) led by Iron Pillar, with Matrix Partners India also participating (Inc42; Wikipedia; StartupTalky)
• Secondary sale, September 2022: Classplus paid ₹67.80 crore for Matrix Partners India and Pivot Ventures’ combined stake — existing-investor exits, not new capital into Testbook (Entrackr; YourStory)

Total disclosed funding across the primary rounds is about $12.55 million (Inc42) — a modest sum for a company that, by FY24, was generating over ₹136 crore in annual revenue. Testbook has not disclosed a post-money valuation since its Series B in January 2020, and neither Entrackr nor YourStory reported a headline company valuation attached to the September 2022 Classplus transaction, only the ₹67.80 crore price for the shares that changed hands. On the numbers available, this is a company that scaled revenue largely on money raised before 2020, then leaned on a strategic buyer rather than a new venture round to survive the two years that followed.

How it makes money

Testbook runs a subscription funnel: a mostly free mock-test experience pulls in aspirants studying for a specific exam, and a minority convert to paid tiers for full test series, live classes and study material. In an account of the business from its early scale-up years, Inc42 reported that around 80% of revenue came from mock-test subscriptions and only about 5% of users ever bought a full paid course, with illustrative pricing at the time of roughly ₹699 a year for mock tests and ₹3,499 for six months of full-course access (Inc42, pricing and mix as reported at that stage of the company’s growth). The part people tend to get wrong about this model is that it looks like a content business when it is really a renewal business: each government exam cycle recruits fresh aspirants who need to pay again, so the company’s real product is repeatable, low-ticket subscriptions sold at the moment students are most anxious about a specific exam date, not a library of content they own forever.

That funnel is expensive to keep filled. Advertising and promotion spend rose from ₹14.91 crore in FY21 to ₹30.4 crore in FY23 — a 104% jump in a year when revenue from operations grew only 59% (Entrackr, June 2022; Inc42, October 2023) — while employee costs made up roughly half of total expenses in FY23 at about ₹95 crore (Inc42). Testbook’s own disclosed unit economics show the strain directly: the company spent ₹2.62 to earn every rupee of operating revenue in FY21, ₹2.31 in FY22, and ₹3.3 in FY23, before FY24’s slower expense growth (up 18%, against 140.2% revenue growth) finally moved that ratio the other way (Entrackr; Inc42).

The numbers

Figures are as reported by Entrackr (FY21, FY22) and Inc42 (FY23, FY24) from Testbook Edu Solutions’ regulatory filings; both use total revenue including other income. The pattern is unusual for an Indian edtech company in this period: growth accelerated sharply in FY24 (140.2% year-on-year, the fastest in the four years shown) at the same time as the net loss shrank by about 35% from its FY23 peak, and FY24’s EBITDA loss of ₹66.2 crore, though still negative, improved against FY23’s EBITDA margin of −192.5% (Inc42).

Where the money comes from

• Geography: close to 70% of Testbook’s user base is drawn from Tier II, III and IV towns rather than metro India, a demographic split both Inc42’s reporting and Testbook’s own company history cite as the founding rationale for the product (Inc42; Testbook company blog, company-stated)
• Exam mix: the platform started as a GATE-only tool with about 13,000 registrants in 2014 and diversified into banking, SSC, railways, UPSC and state PSC test series through 2014-2018, spreading revenue across recruitment cycles that do not all fall in the same months (StartupTalky; Testbook company blog)
• Product mix (as reported at an earlier stage of scale-up): roughly 80% of revenue from lower-priced mock-test subscriptions versus about 5% of users buying full paid courses, meaning most paying users are one-time, single-exam customers rather than repeat subscribers across exams (Inc42)
• The surprise: a company selling into some of India’s lowest-income, most price-sensitive test-takers has needed outsized marketing spend to keep the funnel full — advertising costs more than doubled to ₹30.4 crore in FY23 even as the founders’ original pitch was about affordability, not acquisition spend (Inc42, October 2023)

The risks

• Strategic-buyer dependency: since September 2022, Classplus has held a stake bought directly from Matrix Partners India and Pivot Ventures, and sources told Entrackr the arrangement could end with Testbook being “fold[ed] up completely” into Classplus — a structural risk to Testbook’s independence that is on the record rather than speculative (Entrackr, September 2022)
• Unit economics: Testbook’s own disclosed numbers show it spent ₹3.3 to generate every rupee of operating revenue in FY23, an EBITDA margin of −192.5% that year, and losses that exceeded revenue in three of the last four reported fiscal years (Inc42, October 2023)
• Acquisition-cost escalation: advertising and promotion spend grew 104% in FY23 against 59% revenue growth from operations, meaning the cost of acquiring each paying aspirant rose faster than the revenue those aspirants generated that year (Inc42, October 2023; Entrackr, March 2023)

The takeaway

Testbook’s decade so far argues against reading growth and safety as the same thing. Revenue more than doubling in FY24 looks, on the income statement, like the payoff for a decade of product bets on India’s most price-sensitive exam-takers. But the ownership of the company had already changed two years earlier, at its weakest cash moment, and it changed through an exit by two of its oldest backers rather than through a new investor’s vote of confidence. The lesson is less about edtech than about timing: the rescue that keeps a company alive rarely announces itself as a rescue, and by the time the growth numbers look good again, the terms of who controls the business may already have been set by the quarter when they looked worst.

Frequently asked questions

Who owns Testbook now?

Testbook is privately held. Its founders, led by CEO Ashutosh Kumar, remain involved, while Classplus became a strategic shareholder in September 2022 after buying Matrix Partners India and Pivot Ventures’ combined stake for ₹67.80 crore (Entrackr; YourStory). No party has publicly disclosed a full current shareholding breakdown.

How much money has Testbook raised in total?

About $12.55 million across five primary funding events between 2014 and 2020 — a seed round, a pre-Series A, a Series A led by Matrix Partners India and a Series B led by Iron Pillar — plus the September 2022 secondary sale to Classplus, which paid existing investors rather than adding fresh capital to the company (Inc42; Entrackr).

Is Testbook profitable?

No. Testbook reported a net loss in every fiscal year from FY21 to FY24, though the loss narrowed to ₹84.9 crore in FY24 from ₹129.8 crore in FY23 as revenue grew 140.2% to ₹136.7 crore (Inc42).

What exams does Testbook prepare students for?

Government and public-sector recruitment exams including SSC, SBI and IBPS banking exams, Railways (RRB) recruitment, UPSC civil services, state Public Service Commission exams, GATE and teaching-recruitment tests (Wikipedia; Tracxn).

What happened between Testbook and Classplus in 2022?

In September 2022, B2B edtech company Classplus paid ₹67.80 crore to buy Testbook shares held by Matrix Partners India and Pivot Ventures, becoming a strategic shareholder in Testbook. People close to the deal told Entrackr that Classplus might invest further or eventually absorb Testbook entirely, though no further transaction of that kind had been publicly reported as of this writing (Entrackr; YourStory).

Sources

Figures are as of September 2026. Currency converted at $1 ≈ ₹96.0 as of 18 September 2026 (Trading Economics).

• Inc42, “Testbook — Funding, Revenue & Investors”, company tracker, accessed September 2026
• Inc42, “Testbook Edu Solutions: Overview”, company tracker, accessed September 2026
• Inc42, “Testbook Financials 2026 — Revenue, P&L & Cash Flow”, accessed September 2026
• Inc42, “Testbook — Financials: Profit & Loss”, accessed September 2026
• Inc42, “How Edtech Startup Testbook Turned India’s Love For Govt Jobs Into Profit”, startup feature
• Inc42, “Testbook Spent INR 3.3 To Earn Every Rupee From Operations In FY23”, October 2023
• Inc42, “Top 30 Funded Edtech Startups In Mumbai (2026)”, list, 2026
• Entrackr, “Exclusive: Classplus buys out Matrix and Pivot Ventures’ stake in Testbook”, September 2022
• Entrackr, “Unpacking Testbook’s financial health through FY22 numbers”, March 2023
• Entrackr, “Iron Pillar-backed Testbook’s scale grew nearly 2X in FY21”, June 2022
• YourStory, “Classplus buys Matrix, Pivot Ventures’ stake in Testbook”, September 2022
• Wikipedia, “Testbook”, accessed September 2026
• Testbook company blog, “History of Testbook”, company-stated milestones and founding account
• StartupTalky, “Testbook Success Story”, company and funding background
• Tracxn, “Testbook” company profile, accessed September 2026

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