Byju’s standalone business turns loss-making in FY21 as revenue drops 30%

Representative image. (Source: ShutterStock)

Byju’s standalone business, which constitutes its K-12 (kindergarten to class 12) offerings, reported a loss for FY21 (2020-21) against a profit in FY20 (2019-20) as revenue dropped over 30 percent during the year, which otherwise was a banner year for edtech companies in India, thanks to stay-at-home Covid-19 restrictions.

Byju’s reported a net loss of Rs 2,702.14 crore in FY21 on a standalone basis, against a profit of Rs 7.39 crore a year earlier, the company’s recent filings with the Ministry of Corporate Affairs (MCA) showed. Revenue from operations dropped to Rs 1,378.51 crore from Rs 1,918.25 crore a year earlier, the filings showed.

At a time when Byju’s consumer-facing edtech peers including SoftBank-backed Unacademy and Tiger Global-backed Vedantu clocked a manifold jump in revenue as millions of learners were pushed to online learning due to Covid-19 restrictions, Byju’s total revenue dipped to Rs 1,551.64 crore in FY21 against Rs 2,242.05 crore in FY20. Both Vedantu and Unacademy reported a fourfold jump in their FY21 revenue.

Moreover, as in the case of its consolidated numbers, Byju’s had to readjust its standalone numbers, too, owing to a change in its revenue recognition system as advised by auditor Deloitte. According to the company’s FY20 filings accessed by Moneycontrol, the company had generated revenue from operations of Rs 2,110 crore in FY20. It was adjusted to Rs 1,918.25 crore. Profit for FY20 according to its FY20 filings was Rs 50.76 crore, which was adjusted to Rs 7.39 crore.

The filings also showed that Byju’s gave unsecured loans to four companies during FY21 for working capital requirements. It gave a loan of Rs 140 crore to Byju’s K-3 Education Pvt. Ltd. at an interest rate of 7.30 percent and an additional loan of Rs 604 crore at an interest rate of Rs 6.25 percent. The company also gave an unsecured loan of Rs 1,867.69 crore to WhiteHat Junior at an interest rate of 6.25 percent. As of March 31, 2021, WhiteHat Junior owed Rs 1,806.40 to the company.

WhiteHat Junior was a non-wholly owned subsidiary at the time the loan was granted, the filings showed. Byju’s acquired WhiteHat Junior in August 2020. The loan given to WhiteHat Junior was ratified at an extraordinary general Meeting held on July 19, 2022, the filings showed.

Byju’s also gave an unsecured loan of Rs 7 crore to Grade Stack Learning Pvt. Ltd., an entity that handles Byju’s Exam Prep platform, at an interest rate of 6.25 percent, and an unsecured loan of Rs 25 crore to Toppr at an interest rate of 6.25 percent.

Toppr and Grade Stack were acquired by Byju’s subsequent to March 31, 2021, the filings showed.

Byju’s, the world’s most valued edtech startup, raised its first-ever flat round of $250 million from existing investors on October 17. The company was valued at $22 billion when it last raised funds in March. Last week, the company said that it would be laying off about 2,500 employees across departments in a cost-cutting initiative amid widening losses.

Even in FY19 (2018-19), Byju’s clocked a profit of Rs 20.16 crore on a standalone basis. During FY21, Byju’s employee benefit expenses surged over fourfold to Rs 1,382.89 crore against Rs 322.8 crore a year earlier. The company’s advertising and marketing expenses, too, jumped close to 60 percent to Rs 944 crore in FY21 on a standalone basis. On a consolidated basis, the company had spent over Rs 2,500 crore on advertising and marketing, Moneycontrol reported.

Moreover, on a consolidated basis, Byju’s net losses had soared 20 times, Moneycontrol had reported in September, and the company had reported a marginal drop in its revenue. In an interview with Moneycontrol, Byju Raveendran, co-founder and CEO, blamed changes in accounting methodologies as the reason for the company’s drop in revenue and widening losses.

Byju’s raising a fresh round at existing valuation highlights the struggles faced by Indian edtech companies in raising funds. Earlier this month, Moneycontrol reported how Byju’s lacklustre FY21 results had put a spotlight on the valuations of consumer-facing edtech companies in India. With the pandemic receding, schools, colleges and physical tuition centres have reopened, resulting in a fall in demand for online learning. Moneycontrol had reported how edtech companies are struggling post the pandemic and are scrambling for solutions to match their revenue projections.