After months of delay, Byju’s – the edtech giant co-founded by entrepreneur Byju Raveendran – has finally announced its financial results for the year ending March 2021.
They reveal mounting losses at India’s most valuable unicorn of 45.6 billion rupees ($573 million) from 3.1 billion rupees the previous year as the company’s operating costs more than doubled. Revenue fell 3% to 24.3 billion rupees in the same period. After reports suggested the results were delayed due to differences with the auditor, Bangalore-based Byju’s deferred revenue recognition of nearly 40% on the advice of its auditors.
“It is clear that Byju needs to take corrective action on several fronts, but when it comes to revenue recognition, it is not uncommon for the entrepreneur and the auditor to have different interpretations of how revenue should be recognized,” says serial entrepreneur K. Ganesh.
While Byju’s growth has been fueled by increasing demand for online education, especially during the pandemic, the company has also expanded rapidly through acquisitions, acquiring 15 companies in India, Asia and the US over the past six years.
Since 2021, the company has spent $2.6 billion on acquisitions, including $950 million for Indian test prep provider Aakash Educational Service and $600 million for Singapore’s Great Learning. “Byju’s acquisitions across segments have seen significant growth over the past year,” the company said in a statement. “Aakash in the test preparation segment and Great Learning in the higher education segment have doubled their revenues since the acquisition.”
Despite growing criticism over this buying frenzy, Divya Gokulnath, who runs the company with her husband, co-founder and CEO Byju Raveendran, says the company is being careful with its spending. “We don’t spend just because we have capital,” she said in an interview that was publishedForbes Asia in June
The company is said to be aggressively bidding to acquire Nasdaq-listed 2U, valuing the firm at about $2 billion, more than triple its current market capitalization of $600 million. At the same time, it plans organic growth to expand in India by expanding its network of training centers to 500 locations by the end of the year from the more than 200 it currently has and doubling the number of teachers to 20,000.
Raveendran offered test preparation services before launching Think & Learn with his wife in 2011 and its eponymous tutoring app. The couple’s net worth is estimated at $3.5 billionForbesList of billionaires in real time. That was based on the company’s last funding round in March, when it was valued at $23 billion. Byju raised $843 million in its latest round of funding, including nearly $400 million personally contributed by Raveendran. They say they still haven’t received the promised $150 million from the investor. It has attracted marquee investors such as Facebook founder Mark Zuckerberg, China’s Tencent and US private equity General Atlantic.