From $22B Unicorn to $2B Hopeful: Byju's FY22 Marks New Low, Seeks Funding at Steep Discount

24 Jan 2024 , 09:17 AM

The Ministry of Corporate Affairs (MCA) received the beleaguered edtech unicorn Byju’s FY22 financials on January 23, over 22 months after the reporting period concluded.

While losses skyrocketed from Rs 4,564 crore in FY21 to Rs 8,245 crore in FY22, the company’s consolidated revenue increased by 118% from Rs 2,428 crore in FY21 to Rs 5,298 crore in FY22.

This validates a previous Moneycontrol article that stated the consolidated revenue from operations was over Rs 5,000 crore, with losses exceeding Rs 8,200 crore, based on the FY22 financials presented at the company’s annual public meeting in December 2023.

The company reported an increase in standalone revenue from core business to Rs 3,569 crore earlier in November 2023, but an EBITDA loss of Rs 2,253 crore was recorded.

Byju’s is looking to raise $100 million at a valuation of less than $2 billion, according to a story published by Bloomberg today. This is a 90% decrease from the company’s previous investment round, in which it was valued at $22 billion.

BlackRock, a global investment management organization that owns less than 1% of Byju’s, has reduced the edtech company’s worth from its peak of $22 billion in early 2022 to $1 billion.

This occurs in the wake of several valuation downgrades made by Byju’s investors throughout the previous 12 months. Byju’s was valued at less than $3 billion in November 2023 after tech investor Prosus reduced the value of its interest in the company. This represents an 86% fall from the $22 billion previous estimate.

Thousands of workers have been let go by the company in the last two years as it has struggled with dwindling venture capital funding and a slowdown in the market for online learning services.

Due to its enormous losses and a $1.2 billion loan, the Byju’s auditor warned in the FY22 financials that there is a material uncertainty that could seriously impair the group’s ability to operate as a continuing concern.

The auditor added, ‘However, as further explained in the Note, the management has undertaken various measures to improve its operating financial condition, is also in the process of securing necessary funding arrangements and exploring sale of assets as needed, and hence is confident regarding the future viability of the Group.’

‘In addition, the management believes it is unlikely that the TLB loan will need to be repaid in the near future based on a legal assessment. These financial statements have therefore been prepared on a going concern basis for the year ending March 31, 2022,’ it continued.

According to Byju’s FY22 financial statements, domestic sales accounted for 69%, or Rs 3,464 crore, of the company’s operating revenue of Rs 5,014 crore, with exports accounting for the remaining amount.

BYJU’s Chief Financial Officer, Nitin Golani, stated: ‘We are grateful to our students for the progress we have witnessed in FY 22. Since FY 21, our subscriber base has increased by 125%.Although we are pleased that our overall revenue has increased by 2.2X, we are also conscious of the fact that 45% of the losses are attributable to two underperforming companies, Whitehat Jr. and OSMO. To strengthen our operational financial situation, we have implemented a number of initiatives. While other businesses continue to thrive, these enterprises saw major scalebacks in order to reduce losses in the following years,’ he continued.

For feedback and suggestions, write to us at [e-mail]