Edtech giant Byju’s has finally disclosed its FY22 financial results, almost 22 months after the reporting period ended, revealing a consolidated revenue surge of 118 percent from Rs 2,428 crore in FY21 to Rs 5,298 crore in FY22. However, the net losses have escalated significantly, ballooning from Rs 4,564 crore in FY21 to a staggering Rs 8,245 crore in FY22.
Delayed Disclosure and Financial Highlights
The delayed filing with the Ministry of Corporate Affairs (MCA) raises eyebrows, emphasizing the significance of the numbers within. Byju’s consolidated revenue saw remarkable growth, but the widening losses tell a different story. The FY22 financials confirm earlier reports and indicate the challenges faced by the ed-tech unicorn in a dynamic market.
Byju’s: Ongoing Challenges in Valuation
Byju’s is facing a challenging phase in terms of its valuation, as the company is reportedly in the process of raising $100 million at a reduced valuation of under $2 billion. This represents a significant 90% decrease from its previous funding round when Byju’s commanded a lofty valuation of $22 billion. Adding to the financial pressure, global investment management firm BlackRock, which holds a stake of less than 1 percent in Byju’s, has already revised down the edtech giant’s valuation to $1 billion.
The financial landscape for Byju’s has witnessed a series of downward adjustments in its valuation over the past year. In November 2023, tech investor Prosus devalued its stake in Byju’s, leading to a revised valuation of less than $3 billion. This marked a substantial 86 percent decline from the previously held valuation of $22 billion. These valuation challenges are indicative of a broader trend in the edtech sector, where companies are undergoing reassessment and correction in their perceived worth.
Byju’s Layoffs and Funding Challenges
Byju’s has faced the dual challenge of dwindling venture capital funding and a slowdown in demand for online learning services, leading to thousands of layoffs over the past two years. The financial strain is evident in the FY22 results, with the auditor cautioning about material uncertainty due to substantial losses and a $1.2 billion loan, raising concerns about the company’s ability to continue as a going concern.
Auditor’s Caution and Management’s Response
The auditor in Byju’s FY22 financials highlights a material uncertainty, considering the significant losses and the substantial loan. However, the management is optimistic, citing measures to improve the company’s financial condition, securing necessary funding arrangements, and exploring asset sales. The legal opinion suggests that the TLB loan might not require payment in the foreseeable future.
Byju’s FY22 financial breakdown reveals that 69 percent (Rs 3,464 crore) of the company’s operating revenue of Rs 5,014 crore came from domestic sales, while the remainder originated from exports. Nitin Golani, Chief Financial Officer of Byju’s, acknowledges the underperformance of certain segments like Whitehat Jr and OSMO, contributing to 45% of the losses. The company has undertaken measures to scale down these businesses.
Byju’s CFO, Nitin Golani, remains optimistic about the growth seen in FY22, citing a 125% increase in the subscriber base from FY21. While the total income has grown significantly, efforts have been made to address underperforming businesses. The future trajectory of Byju’s will be closely monitored as it navigates the evolving edtech landscape and implements strategies to ensure sustainable growth.
In conclusion, Byju’s delayed FY22 financial disclosure has unveiled a mixed financial picture, showcasing revenue growth but accompanied by substantial losses. The challenges in valuation, funding, and strategic realignment underscore the complexity of the edtech market. As Byju’s addresses underperforming segments and navigates a changing landscape, the industry will closely watch its moves and anticipate the impact on the broader edtech sector.