BYJU's finally reports FY21 earnings but mounting losses fail to soothe concerns

Edtech firm BYJU’s, which was recently in the headlines for issues including layoffs at its subsidiaries, has reported a wider net loss and a drop in revenue in FY21, becoming one of the biggest loss-making unicorns in India.

The company’s revenue fell 14% year-on-year to Rs2,428 crore ($305.8 million) on a consolidated basis and it reported a net loss of Rs 4,500 crore in the year ended March 31, 2021— nearly 17 times the Rs 262 crore loss of FY20, according to media reports.

Other unicorns that reported large losses in FY21 include hospitality major OYO at Rs 3,944 crore, Udaan at Rs 2,482 crore, Walmart-owned Flipkart at Rs 2,446 crore, and Eruditus at Rs 1,934 crore, according to a list curated by Entrackr.

BYJU’s has missed its own deadlines to file its audited financials for FY21 by nearly 18 months. The startup — backed by scores of high-profile investors including Blackrock, Tiger Global, UBS, Prosus Ventures, Sequoia India and Lightspeed Venture Partners — was sent a letter by India’s Ministry of Corporate Affairs (MCA), asking to explain the delay, Bloomberg had reported on Aug. 25.

Even as it filed its earnings on Wednesday, it lacked details such as cash flow and expenses.

While the pandemic came as a shot in the arm for the edtech industry, leading to many funding rounds by startups, it is now feeling the heat as schools have reopened reducing the reliance on edtech. Moreover, there is the pressure of high inflation, the Russia-Ukraine war, stock market crashes and other macro headwinds.

Edtech companies, which were the darlings of investors, are feeling a harder pinch.

A clutch of edtech startups such as Crejo.Fun, Udayy, Lido and SuperLearn have had to shut their operations. Bigger players such as Unacademy and Vedantu have had to fire employees.

The last few months have been especially difficult for BYJU’s, which has been caught in a series of bad news including layoffs at its subsidiaries Toppr and WhiteHatJr, reportedly not making timely payments to the promoters and private equity firm Blackstone Group for its acquisition of Aakash Educational Services Ltd (AESL) last year.

Last valued at $22 billion, BYJU’s has also been criticised for overspending on marketing and acquisitions, while having to fire employees from its existing portfolio of companies. Recently it was also in the news to acquire US-based company 2U.

In an interview with YourStory recently, BYJU’s founder Raveendran Byju said that the company is heading towards cash-flow positivity in terms of BYJU’s , Aakash Education, and Great Learning. White Hat Jr, however, is still burning significant cash, and will take a few more quarters to break even, he said.

“The group [BYJU’s] might fall like a pack of cards if investors don’t step in and take some hard decisions,” Atul Thakkar, director at Anand Rathi Investment Banking had told DealStreetAsia two months ago.

In April-July 2022, BUJU’s logged a revenue of Rs4,530 crores, it said in a statement on Wednesday.

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