Byju’s WhiteHatJr chapter may end

Edtech says no such plan, is being optimised for growth instead

Byju’s WhiteHatJr chapter may end
The development comes just a few months after it laid off a significant number of employees.

Edtech unicorn Byju’s is looking at shutting down its subsidiary WhiteHatJr, a coding platform that it acquired over two years ago at an enterprise valuation of $300 million, sources aware of the development said. WhiteHatJr was one of the most high-profile acquisitions made by Byju’s out of the 17 acquisitions it has made till date. However, Byju’s now feels that the coding platform has drawn considerable criticism and lost the potential it once had.

“Byju’s co-founder Byju Raveendran himself is not keen on continuing to run under the brand anymore,” sources said.

Further, sales conversions have also dropped massively after reopening of schools post-Covid, therefore WhiteHatJr’s custom acquisition cost (CAC) didn’t make sense for the amount of revenue it was raking in.

The development comes just a few months after it laid off a significant number of employees. Last year, the company announced that it would be cutting jobs as part of a restructuring effort, which reportedly affected around 10% of its  workforce. The move was seen as a sign that the platform was struggling to maintain its growth and was facing increased competition from other edtech startups.

“The startup had almost massively scaled down online and print advertising spending last year to keep costs under check. But the CAC cost was still too big to sustain the expenditure of running the company, even after WhiteHatJr began a shift towards below-the-line (BTL) marketing campaigns, moving away from print and TV campaigns,” sources said.

A Byju’s spokesperson, however, denied that it is planning to shut down WhiteHatJr, and hinted that it is instead optimising it for growth.

“Byju’s is constantly evaluating and optimising its business operations towards global growth. As an ongoing activity, we are actively evaluating all our business units to ensure that they are aligned with our path to profitability. Regarding the specific question on WhiteHatJr, we have no plans of shutting it down. We are merely optimising it for organic and efficient growth,” the spokesperson added.

WhiteHatJr was founded in 2018 by Karan Bajaj, a former executive at Discovery Networks, and it quickly gained a reputation as a coding platform for kids that provided a fun and engaging way for children to learn coding skills. The platform’s success led to the attention of Byju’s, which acquired it in August 2020.

However, the acquisition was not without controversy.  In late 2020, Bajaj filed defamation lawsuits against several of his critics, including angel investor Aniruddha Malpani and ex-Cisco employee Pradeep Poonia.

Despite the challenges faced by WhiteHatJr, the online code training vertical for school students is still seen as a valuable market for Byju’s. However, the edtech industry has been facing increased competition and scrutiny, especially after several edtech laid off employees to cut costs.

During the height of a funding frenzy into various consumer internet segments in CY21, edtech startups alone raised a record $4.2 billion across 310 rounds in CY21. This was higher than the $2.3 billion raised across 220 rounds in CY2019. Since most Indian schools and educational institutions remained shut during 2020, edtechs saw a tremendous uptick in registrations and subscriptions.

However, by 2022, growth lost momentum, shaking up the segment. This resulted in massive layoffs in firms such as Byju’s, Vedantu and Unacademy, while multiple smaller startups shuttered operations.

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First published on: 24-02-2023 at 06:15 IST
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