Byju Raveendran said that he is not worried at all about paying the rest of the acquisition money as the core education business is doing excellent and the company has a healthy cash reserve of more than $1 billion…reports NISHANT ARORA
After six stressful and tough learning months, Byju Raveendran is back in the game, consolidating the loss-making acquisitions like WhiteHat Jr and optimising the rest, while doubling down on opening more physical tuition centres. According to him, “the worst is finally over” and there is only “growth ahead” as seen in the company’s FY22 financial results.
The edtech company with nearly $22 billion valuation went through an ordeal as it delayed the audited FY21 financial reports for nearly 18 months, inviting government scrutiny and serious questions from the public.
The FY21 report is out, with massive losses to the tune of Rs 4,500 crore, while BYJU’s needs to pay the rest of the acquisition amount (about Rs 2,000 crore) to global VC firm Blackstore in the $950 million Aakash acquisition by September 23.
Raveendran told IANS that he is not worried at all about paying the rest of the acquisition money as the core education business is doing excellent and the company has a healthy cash reserve of more than $1 billion.
“The losses that you see in FY21 is because 40 per cent of the revenue got deferred on account of two things: revenue recognition change because of streaming revenue getting recognised over the period of consumption of the product,” Raveendran explained in a free-wheeling interview.
He said that the other reason for the audit delay was that EMI or credit sales were getting recognised after the complete significant collection was done.
“There are the main reasons for audit delay, apart from the initial reasons like Covid and then the complexity of our business moving from a single product, single geography offering to multi-product, multi subsidiary offering across the world,” emphasised Raveendran, adding that while the revenue got pushed out, the cost expenses during the financial year did not.
In 2007, he founded the test preparation business Byju’s Classes, and in 2011 Raveendran founded BYJU’s with his wife, Divya Gokulnath.
Last year, he went on an acquisition spree. The edtech unicorn made at least 10 acquisitions for a cumulative transaction value of about $2.5 billion — including Delhi-based offline test preparatory services provider Aakash for $950 million.
Raveendran said that loss-making acquisitions like WhiteHat Jr, the beleaguered coding platform BYJU’s acquired for $300 million, are now being consolidated.
“WhiteHat Jr is underperforming as it has a very high marketing cost attached to it. This is one of the businesses where we are seeing Covid pull-back. We have the structural challenges as it has an inefficient cost structure,” he told IANS.
Raveendran said that they don’t have the product challenge with WhiteHat Jr as they added Maths with coding on the platform.
The edtech major clocked gross revenues of nearly Rs 10,000 crore in FY22, leaving its investors happy and Raveendran, a relieved man.
“From here on, we will double down on growth as our core business is booming. Both Aakash Institute and Great Learning are doing excellent and have doubled their revenues,” Raveendran stressed.
In June, BYJU cut at least 600 jobs — asking 300 employees at its Toppr learning platform and another 300 at coding platform WhiteHat Jr to go.
On any future job cuts, Raveendran said that apart from getting rid of few redundant roles and some functions becoming optimised, BYJU’s is actually hiring more people while absorbing the right mix of workers into other products.
“We today have 50,000-plus employees, that’s up from 20,000-plus 18 months back. The total number of employees in the ecosystem is growing. Several new functions and initiatives have been created where we are hiring a lot of teachers, because of the hybrid learning centres like Akash which are really growing well,” the BYJU’s CEO told IANS.
He said BYJU’s is hiring at least 1,000 employees on a month-to-month basis, even more.
Raveendran is confident that the remaining amount in the Aakash deal will reach Blackstone soon, as he charts a new course for BYJU’s in months to come, while the next big funding raise is in the offing.