The year 2022 was indeed a time of reckoning for the world's most-valued edtech startup, Byju's, as the company had come under fire for accounting irregularities, alleged mis-selling of courses, and mass lay-offs. But its founder, Byju Raveendran is hopeful of having a better 2023 as he feels that the worst is over for the edtech titan.
"We have revamped a lot of our strategies and you will see that in Byju's 2.0. the worst is over for us, and 2023 will be only better," said Raveendran in a special interview with Moneycontrol on the sidelines of The World Economic Forum 2023 annual meeting, held in the Swiss ski resort town Davos.
"We are fast moving towards a sustainable long-term year of growth with strong fundamentals, so 2023 is going to be a much much better year for us in terms of both India as well as some core segments," Raveendran added.
Raveendran also claimed that by the end of this quarter (Jan-Mar FY23) or by the next quarter (April-June) FY24 Byju's will turn profitable on a company level. To be sure, the company had exercised massive layoffs of about 2,500 employees in October last year, with an aim of achieving profitability at a company level by the end of FY23 (2022-23). However, Raveendran said that the company will turn profitable on a company level in the next fiscal year.
"We were very close to profitability for FY20 (2019-20), but then with faster growth and since we grew inorganically with all these large acquisitions, we had a lot of one-time acquisition cost, apart from the revenue recognisition change, which made the losses much higher for FY21," Raveendran said.
"You will see both (revenue and profit) moving in the right direction. Continued growth and losses coming down, and we will start hitting profitability. This has been a conscious effort," Raveendran added.
Raveendran also said that most of Byju's subsidiaries have already turned profitable. Byju's majorly has three large subsidiaries--Great Learning, Aakash, and WhiteHat Junior.
"(WhiteHat Junior) has a strong product market fit, but we haven't figured out the go-to market strategy in new markets. So the cost of customer acquisition is higher there, but otherwise all our bigger acquisitions are growing," Raveendran said on WhiteHat Junior, which reported a loss of more than Rs 1,500 crore for FY21 for a revenue of Rs 326 crore.
However, Raveendran said that in FY22, the company will "surprise everyone" with its revenue and loss numbers.
Raveendran's bullishness on FY22 (2021-22) revenue numbers comes a few months after the company received a lot of flak for registering a fall in sales, albeit marginal, for FY21 (2020-21), the first year of the pandemic, which gave a fillip to the overall edtech sector due to pandemic-led stay-at-home restrictions. Almost all edtech companies grew manifold in revenue during the year. Byju's revenue decline, however, was due to a change in the way the company recognised its revenue.
Byju's losses, meanwhile, widened nearly 20 times, making the edtech giant the biggest loss-making startup in India for FY22. Byju's reported a loss of more than Rs 4,500 crore for the year, thanks to a surge in its employee, advertising, and marketing costs.
Raveendran, however, said that the company's investors and senior-level employees are not concerned by the noise in the media. He claimed that none of the company's investors have exited the company in the last 12 months, neither have its senior-level employees.
"Those who are closest to the action, they are not anxious at all. If there are real issues on the ground, first you see top-level exits. (But in our case), there has not been a single top level exit in the last 12 months, with so much noise in the media. We have more than 70 investors and not a single investor has left either," said Raveendran.