Edtech major Byju’s clocked a revenue of Rs 2,428 crore in the financial year ended March 2021, far below its own projections. Its losses in the fiscal rose 17 times to over Rs 4,500 crore as the start-up disclosed its financials for FY21, following an 18-month delay that also attracted government scrutiny.
Byju’s revenue of Rs 2,428 crore in FY21 was almost 14 per cent below that in FY20 when it had posted a revenue of Rs 2,704 crore. It posted a loss of Rs 4,588 crore in 202-21, compared to a loss of Rs 260-crore loss it had incurred in FY20. In the run up to its financial declarations, the start-up had, in several media interviews, claimed that it was expecting to achieve a revenue of $1 billion (Rs 8,000 crore) in FY21.
The financial declarations of Byju’s come after apparent delay in signing off the results by auditor Deloitte, which had raised compliance related issues at the start-up. Deloitte had flagged certain concerns with the way Byju’s was recognising its revenue, which delayed the submission of results to the Ministry of Corporate Affairs (MCA).
The Bengaluru-headquartered start-up attributed the decline in revenue to a change in which its revenue was calculated. It said there was “significant business growth” in FY21 over FY20, “but since this is the first year where new revenue recognition started because of a Covid related business model change, almost 40 per cent of the revenue was deferred to subsequent years”. “The rationalised growth between FY 21 and FY 20 is a result of the changes made in the way Byju’s recognises its revenue, as advised by its auditors.”
Byju’s is also said to have delayed its payment to private equity major Blackstone for its $1-billion acquisition of Aakash Educational Services. Blackstone owns a 38 per cent stake in Aakash, and it is learnt that Byju’s will close its payment to them by the end of the month.
On account of the delay in submitting annual financial statements, the MCA had sought a response from Byju’s in the last week of August. As per MCA’s norms, private companies are required to submit their annual financial results by September 30 of the next fiscal. However, for FY21 results, Byju’s missed the official deadline by about 12 months. In fact, it has about two weeks left to file its annual financial statements for FY22.
In a statement, Byju’s said that for FY22, it has clocked Rs 10,000 crore in gross revenue. However, these are unaudited results. For FY21, it said it has received an unqualified report from its auditors which essentially means that the auditor has not raised discrepancies in its financial statements for the financial year.
Since the beginning of 2022, Covid norms across the country have eased, meaning that schools and educational institutions have opened up, diminishing the need for online education services.
That, coupled with the funding crunch due to geopolitical tensions led by Russia’s invasion of Ukraine and rising inflation, has meant that capital has been hard to come by for start-ups and edtech firms have faced the brunt of it. Last week, Lido Learning initiated insolvency and bankruptcy proceedings, six months after shutting down operations owing to a cash crunch. Before that, edtech start-ups Udayy and Crejo.Fun, which collectively had to let go of 270 employees, also shut down earlier this year.
Start-ups in the country have collectively fired more than 12,000 people so far, with those in the edtech and e-commerce sector being particularly impacted.
Byju’s, is said to have laid off as many as 2,500 people from across its businesses — including employees from its sales team and WhiteHat Jr. and Toppr, two start-ups it had acquired in multi-million dollar deals in the last two years. Its closest rival Unacademy officially maintains to have laid off around 600 employees, primarily from its test preparation business, while impacted employees peg the number to be around 1,000.
