Edtech decacorn Byju's delayed the inevitable, but couldn’t soften the blow. After reporting its FY21 financials post a 12-month delay, the edtech firm has been the subject of heightened scrutiny. To put it simply, the numbers reflect poorly on the company, which is valued at a whopping $22 billion, that many investors and startup ecosystem observers find “bloated”.
Byju's reported an astounding net loss of over Rs 4,588 crore in FY21 on consolidated revenues of Rs 2,428 crore (a slight dip from FY20). And this, at a time when the pandemic fuelled an edtech boom, particularly in the K-12 segment as India’s 250-million-plus school-going population was confined to homes and dependent on online learning.
Even as new user sign-ups and learning hours went up, Byju's ‘business promotion expenses’ and ‘employee benefit expenses’ ballooned, becoming the two biggest costs on its FY21 balance sheet.
It turns out that Byju's losses for FY21 were 10x that of its cumulative losses in the seven years between FY14 and FY20. Filings with the Registrar of Companies (RoC) reveal that from FY14 to FY20, the company’s cumulative losses stood at Rs 452.77 crore on a collective total income of Rs 4,976.15 crore.
Byju's Co-founder & Director Divya Gokulnath, however, urged the ecosystem to not make much of its FY21 numbers.
In a LinkedIn post today, she wrote, “It’s easy to forget in the flood of negative headlines that we are 18 months post FY21, and that Byju’s has grown more than 4 times in this span. Or that our ‘widening losses’ in FY21 have been cut to half in FY22.”
Interestingly, in the two years prior to FY14, Byju's-parent Think & Learn Pvt Ltd was a profitable company. The Byju Raveendran-owned firm, still small in size then, had turned a net profit of Rs 1.38 crore on a total income of Rs 20.81 crore in FY12 and FY13.
But, as the edtech platform scaled rapidly, its total expenditure ballooned across acquisitions, overheads, marketing and promotion, teacher fees, and so on. Expensive partnerships with sporting events, and sports bodies, along with the onboarding of superstar Shah Rukh Khan as brand ambassador hurt the bottomline further.
During this period, Byju's also raised more than $5.5 billion in funding and made 16 acquisitions, according to Crunchbase. Its backers included marquee venture capital firms such as Tiger Global, Sequoia Capital India, Prosus Ventures, Lightspeed Venture Partners, Mirae Asset, IIFL Finance, Sumeru Ventures, Chan Zuckerberg Initiative, and others. According to Tracxn, Byju's has raised over 26 rounds of funding till date.
While announcing its FY21 results, the company also shared that it has grossed revenues of Rs 10,000 crore in FY22, which is almost 4X that of last fiscal. However, these financials remain unaudited.
Byju's further added that it has generated sales of Rs 4,350 crore in the first four months of the current fiscal (FY23). Whether the storied edtech can turn the tide—and turn a profit—is left to be seen.
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