BYJU’S continues to bleed as the edtech major reported an EBITDA loss of ₹2,253 crore in FY22, about 6.36% lower than the ₹2,406 crore loss it reported in FY21. After a prolonged delay in releasing its financial statements for the financial year 2021-22, the embattled edtech giant in a statement said that it has seen a 2.3x growth in revenue to ₹3,569 crore at the end of FY23.
It’s important to note that the results are that of BYJU’S core business operations and do not include its acquisitions. The company reported a total income of ₹3,569 crore for FY22 from ₹1,552 crore in the previous year.
BYJU’S has not published its net loss and only given its EBITDA losses, in the statement released. The edtech said it plans to release the consolidated numbers with the Ministry of Corporate Affairs in the next three weeks.
In a letter to the board members of Think & Learn Private Limited, the parent company of BYJU’S, accessed exclusively by CNBC-TV18, Deloitte said, “The financial statements of the Company for the year March 31, 2022, are long delayed…we have not received any communications on the resolution of the audit report modifications in the respect of the year ended March 31, 2022, the status of the audit readiness of the financial statements and the underlying books and records for the year ended March 31, 2022, and we have not been able to commence the audit as on date.”
The letter further added that this delay will have a significant impact on their ability to plan, design, perform and complete the audit in accordance with the applicable auditing standards.
The beleaguered firm also saw three directors resign from the company’s board in June 2023, over how the business was being run at BYJU’S. The three directors who resigned were G V Ravishankar of Peak XV erstwhile Sequoia Capital India, Vivian Wu of Chan Zuckerberg Initiative and Russell Dreisenstock of Prosus.
Prosus issued a statement saying BYJU’S executive leadership regularly disregarded advice and recommendations relating to strategic, operational, legal, and corporate governance matters despite repeated efforts from the Prosus Director. And this is why its representative exited the edtech firm’s board. Peak XV, meanwhile, said it resigned from BYJU’S board due to a lack of internal controls at the edtech company.
Cost-cutting measures and business restructuring
In a bid to achieve profitability, the company in September 2023 undertook an exercise to reduce the workforce by about 3,500 and end duplication in roles across the organisation. The current job cuts will impact staffers at manager, manager and vertical leaders’ levels.
BYJU’S has previously taken a number of cost-cutting initiatives, particularly on the employee front. Since late 2022, the edtech giant has let go of more than 2,500 employees. The most recent job cuts came in June this year when it laid off 500-1000 employees. The company’s headcount has come down from 50,000 in December 2022 to 37,000 at present.
The move came after BYJU’S announced Arjun Mohan BYJU’S new India CEO on September 20, who has been tasked with completing the restructuring process to steer a revamped and sustainable operation ahead. The edtech major has set the target to become profitable by March 2024 on account of consolidation and restructuring of the organisation and settlement of a $1.2 billion loan.
BYJU’S $1.2 billion loan case
The edtech major is also reorganising its businesses abroad. Sources had earlier told CNBC-TV18 that BYJU’S is considering the sale of Epic and Great Learning for $800 million to $1 billion. The sale would be part of the plan to become debt-free and bring the business back on track.
BYJU’S had bought Epic for $500 million and Great Learning for $600 million in 2021. If the proposal is accepted, it should bring some cheer to the beleaguered startup.
The edtech major has also submitted a repayment proposal to lenders, in which it has offered to pay back its entire $1.2 billion term loan in less than six months. It has offered to repay $300 million of the distressed debt within three months if the amendment proposal is accepted and the remaining amount in the subsequent three months.
CNBC-TV18 has learnt that the lenders are reviewing the proposal and have sought more details about how the repayment would be funded.
To repay the loan, BYJU’S has been trying to raise $1 billion in structured debt and equity since the start of the year. However, it has not managed to close the round amid ongoing challenges on the domestic as well as international fronts. In May, the edtech company raised debt funding of $250 million from US investment firm Davidson Kempner and is still awaiting the remaining $700 million dollars, which will mostly be raised in equity.
Significant valuation markdown
BYJU’S also witnessed its valuations being slashed. On June 27, Prosus has drastically slashed 9.6% stake in the edtech giant, diminishing the edtech’s valuation to $5.1 billion. In May, BlackRock slashed BYJU’S valuation by 62% to $8.3 billion.
Peak XV Partners had also told its limited partners (LPs), or investors in its funds, on July 26 that it is marking down its investment in the company over lack of visibility into its audited financials. It, however, did not divulge any details on the value of the holdings that it is likely to cut.