BENGALURU: Edtech major Byju’s, which released its financial results for FY21 on Wednesday, is yet to make final payments for the billion-dollar tuition chain Aakash Educational Services deal. It has to pay nearly Rs 2,000 crore to sellers by September 23.
Also, WhiteHat Jr, which offers coding classes to school kids, was acquired by Byju’s in 2020 for nearly USD 300 million, and this company has contributed significant losses to Byju’s in FY21. With layoffs and misleading advertising, WhiteHat Jr has been in many controversies.
The edtech major’s consolidated loss in FY21 was above Rs 4,550 crore, though the company said its acquisitions across companies have seen substantial growth, it is said not all is well with these companies. Byju’s has acquired close to 20 companies including Osmo, EPiC, Tynker, WhiteHat Jr, Aakash, Great Learning, Gradeup and GeoGebra in recent times. Also, in FY21, during the pandemic, many edtech companies witnessed significant growth.
So, what exactly happened to Byju’s?
With the way revenues of FY21 have been recognised as being significantly different to reports of FY19-20, it is very difficult to decipher the 20x odd increase in Byju’s losses, said Ganesh Mahadevan, Partner, Thinksynq.
“One way it’s good is that the auditors have insisted on the right revenue recognition starting 2020-21 and it augurs well for all the stakeholders in spite of the immediate pain. More than the problem in financial reporting at Byju’s, the business model is shaky,” he added. Angel investor Aniruddha Malpani said there are so many red flags. Byju’s doesn’t have a chief financial officer (CFO) for the last year and the board members are shareholders.
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“The very purpose of edtech was to disrupt classroom imparted education by going online and getting massive scale advantage through this. With opening up of their own coaching centres and buying out legacy coaching centres like Aakash, one is getting very confused about where Byju’s is going,” said Mahadevan.
Though experts question Byju's model, they say online education is here to stay. "The losses that the ed-tech industry players have faced during the last quarter are part of the curve that each industry faces," said Yuvraj Krishan Sharma, CPO & Co-Founder of Edverse. He added that online education has led to new opportunities for business growth.
Ravi Bhushan, founder and CEO, BrightCHAMPS said with emerging technologies such as Web3 and advancements in AR/VR and AI/ML, the best in edtech is yet to come.