Nearly two out of every three Byju’s Tuition Centre customers (~60 percent) have requested refunds in the past two years, indicating there is significant parental and student dissatisfaction with the pedagogy, marking yet another setback for the world’s most valuable edtech startup.
Between November 9, 2021, and July 11, 2023, a total of 43,625 refund requests were submitted to Byju’s Tuition Centres, per internal data exclusively obtained by Moneycontrol. Of these, Byju's has processed 41,198 requests, accounting for approximately 95 percent of the total refund requests. To date, Byju’s has sold nearly 75,000 tuition centre subscriptions.
“We refute these baseless numbers. Your information is wildly inaccurate,” a spokesperson for Byju's said. He, however, declined to provide actual numbers to rebut the accuracy of the data.
The high refund request rates suggest that students and parents are dissatisfied with the quality and format of the courses offered by Byju’s Tuition Centres. The BTCs were once seen as a driver of the company’s future growth, but Byju’s has since changed course and put its expansion plans on hold. It has decided not to open any new tuition centres this year, a significant departure from its original goal of leasing at least 300 additional centres.
Also Read: Byju's holds call with over 100 investor representatives on audited results, Term Loan B
Parents frustrated
Moneycontrol spoke with the parents of 15 students to assess their sentiments, particularly in light of the barrage of bad press Byju’s has received of late. Except for the parents of two students, the rest engaged in extensive discussions on various issues. Those discussions encompassed a range of issues from inadequate CCTV camera installation and irregular classes to falsified attendance records and insufficient communication regarding cancellations and refunds.
Moneycontrol was added to a WhatsApp group of 127 parents whose children are registered at Byju's Tuition Centre in Saraswati Nagar, Jodhpur. The group also included a few former employees who were laid off by the company.
Two of the messages in the group read as follows:
“Byju’s ko refund karna padega.” (Byju’s will have to issue a refund.)
“Hum sab ko refund chahiye aur ye sirf consumer court dila sakta hai.” (We all want a refund and only the consumer court can help us.)
These messages were among the numerous expressions of frustration by parents in the group. Their discussions revolved around strategies to enhance their refund appeals following a series of unsuccessful attempts. Furthermore, they shared experiences of unresponsiveness and discourtesy by Byju's staff to their requests.
Parents in the group also shared refund request letters they had sent to Byju's. They had visited the Saraswati Nagar Tuition Centre at least twice to meet with the management there, but had not received a satisfactory response.
“Classes have not been happening on time. Our kids are sitting in staff rooms and studying instead of studying in classrooms. Students are constantly complaining about the quality of lectures. So many times we asked the managers to address these issues, but never got any response,” said a parent, requesting anonymity.
“The trigger actually was that in July, the class manager on whom we all trusted the most with our students, was forced to resign and when he refused to do that, the company leveled serious false allegations against him and terminated him with immediate effect. We didn’t want to continue sending our children to a tuition centre that has such horrible on-ground issues,” the parent added.
As things stand, all the parents have stopped sending their children to the tuition centre and have submitted formal requests for refunds. However, staff at the centre have been marking the children present every day to show higher occupancy, and have not responded to parents' refund requests. Moneycontrol has seen screenshots of these developments.
Also Read: Byju's appoints Infosys veteran Richard Lobo to head HR
From one crisis to another
The ongoing challenges with BTCs are yet another headache for India’s most valuable startup, which is already facing a plethora of challenges. The company had been banking on the concept of hybrid learning to mitigate the impact of the post-Covid slowdown. However, Moneycontrol reported in July that BTC had come under fire when some of its area business heads (ABHs) planned to protest against Byju’s for allegedly withholding their incentives and variable pay.
Byju’s also conducted an emergency town hall with all BTC employees to address their concerns and agreed to pay incentives from August and the variable pay by next quarter. The company also said that it would not lay off any BTC employees.
Byju’s was the first edtech company in India to make inroads into offline tutoring, anticipating that it would become an integral part of tutoring after the Covid-19 pandemic. The company had set aside more than $200 million for this initiative and hoped to launch 500 such tuition centres across 200 cities in India in 2022. It also hoped to create 10,000 new jobs through these tuition centres.
“Managing offline classes is a whole different beast. Ideally, a company exploring that should have either hired an experienced (offline experience) team or acquired a company,” said a top edtech investor, requesting anonymity.
The issues within BTC have emerged just as Byju's is grappling with the challenge of finalising a much-needed funding round. Concurrently, the company is engaged in negotiations with Davidson Kempner, the entity that extended approximately $250 million to Byju’s, with shares of Aakash Educational, a test preparation institute acquired by Byju’s, serving as collateral.
Furthermore, the company is in discussions with its Term Loan B lenders in the US, who are insisting on a higher interest yield for the $1.2 billion debt it procured from them in November 2021
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