The country’s most-valued edtech startup, Byju’s saw its net loss shooting up to Rs 4,588 crore in FY21 from Rs 231.69 in FY20. The company’s total revenues during the year saw a marginal growth of 3.32% to 2,428.39 crore.
The edtech firm filed its FY21 results to the ministry of corporate affairs on Wednesday after receiving an unqualified report from its auditor, Deloitte Haskins & Sells.
In an interview with FE, founder and CEO, Byju Raveendran said that huge jump in losses during FY21 was due to deferral of 40% of revenues to subsequent years but costs did not get pushed. He said that losses will reduce in FY22. For FY22, he said that the company has registered nearly Rs 10,000 crore in gross revenues. Between April and July 2022, it logged a revenue of Rs 4,530 crore in its K-12 education business.
The deferral of revenue meant that revenue recognised from for few courses that Byju’s sells on a multi-year basis (up to 3 years), has got deferred across a three-year period rather than booked in a single year. This revenue recognition policy was suggested by Deloitte since students are allowed to cancel the multi-year subscription and get their refunds anytime during the subscription plan.
In FY21, Byju’s expenses saw a 144% jump to Rs 7,027.47 crore. Two major components within it saw an exponential jump – employee benefit and business promotion expenses. While employee benefit expenses saw over 300% increase to Rs 1,943.30 crore, business promotion expenses rose 150% to Rs 2,250.94 crore.
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Raveendran said that the company had a higher number of sales reported from courses that were sold via EMI options during FY21 compared to the previous years mostly due to Covid where demand for such courses peaked.
“In credit sales (EMIs) our revenue is recognised (on the books) only after a significant collection has been completed from the users, so our auditors advised us to defer the revenue over the years instead of reporting it in a single financial year. The remaining revenue will be recognised in FY22 since much of the fee collected in FY21 will now be reported in FY22. However, in FY22, these types of sales (EMI-based) were much lower so we will see higher revenue growth in FY22,” Raveendran said.
He said Byju’s acquisitions across segments over the last year have seen substantial growth. Aakash in the test prep segment and Great Learning in the higher education segment have doubled their revenues since the acquisition.
The company’s acquisitions in the US, including Osmo and Epic! have scaled up rapidly in North America, in terms of both adoption and engagement. “Our revenue recognised from our international acquisitions already contributed to around 25% of our revenue in FY22,” Raveendran said.
Byju’s FY21 financials were delayed by almost 18 months beyond the prescribed timeline. Raveendran said that Covid, several acquisitions by the company, and the change in the booking of revenues, were the three main reasons leading to delay in finalising the results. He said that there may be some delays in filing the results for FY22 also but not as much as it was for FY21 and it will regularise shortly. Raveendran said that the six month period provided by the ministry of corporate affairs for filing results is fine.
Byju’s is reportedly in the middle of funding talks to raise over $500 million (about `3,900 crore) at a valuation of around $23 billion. It is said to be in discussion with Abu Dhabi’s Sovereign Wealth Funds (SWF) and Qatar Investment Authority (QIA) for the new proposed $500 million round.
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Byju’s, which is planning to go public, has also been struggling to manage cash for its operations. To reduce its cash burn, the company confirmed it has so far laid off nearly 1% of its 50,000 staffers. On IPO plans, Raveendran said that it has been pushed by 9-12 months during which the company would wait and watch the macro situation and then take a call. He added that going forward there shouldn’t be much layoffs as the company has optimised its workforce and reduced redundancies which happened due to acquisitions.
Till now, the company has raised roughly $5 billion in capital and is valued at over $22 billion, which has helped it acquire more than 12 companies in 2020 and 2021, when the edtech sector was booming, thanks to lockdowns because of which students were forced to learn from homes.
This year, Byju’s also launched its hybrid learning offering centres through the launch of ‘Byju’s Tuition Centre’ – a comprehensive programme for students that blends offline and online learning experiences. The startup earlier shared targets to enroll 1 million students for the programme in the next two years with a plan to invest up to $200 million into the offline learning model.