SUMMARY
The startup plans to invest more in the hybrid model and will add another 250 physical coaching centres to its kitty in 2023 through Aakash BYJU’S
Will move away from the exponential growth phase of 2017-2021 and will now focus more on growth and efficiency: CEO Raveendran
BYJU'S saw its losses surge nearly 20X in the financial year 2021-21 (FY21) to INR 4,588.75 Cr compared to INR 231.69 Cr in FY20
In an internal mail circulated to employees, edtech major BYJU’S chief executive officer Byju Raveendran has termed 2022 a defining yet challenging year for the company.
This came even as the startup faced a volley of challenges from mass layoffs, increased regulatory scrutiny over malpractices and mourning losses over the course of the year.
Raveendran told the employees that the startup plans to hire another 10,000 teachers in 2023 as it looks to scale its offerings in the offline space.
“BYJU’S is a large and caring family of 50,000+ members. We are among the top 30 private employers in India – and the only startup in that list. We have nearly 20,000 teachers on our payroll, making us probably the largest employer of teachers anywhere in the world. And we are planning to hire 10,000 more in 2023,” added the mail reviewed by Inc42.
The CEO said that the edtech unicorn plans to invest more in the hybrid model and will add another 250 physical coaching centres to its kitty through Aakash BYJU’S.
Highlighting that the company moved to an inside sales model this year, Raveendran also said that the decacorn was targeting group profitability by the end of 2023.
Interestingly, Raveendran recently told Inc42 that, by the end of FY23, the company would be in a position where BYJU’S, Aakash and Great Learning would start becoming profitable on a standalone basis. This would, then, fuel the high cash burn on account of cash-guzzling WhiteHat Jr. It is pertinent to note that WhiteHat Jr contributed 26.73% to the total loss of the edtech group in FY21.
In what appears to be emblematic of the current investor sentiment, the CEO added that the company would move away from the exponential growth it undertook between 2017 and 2021 and focus more on ‘growth and efficiency’ in the year to come.
“While we were expecting this third phase to begin in 2024, the macroeconomic changes of 2022 meant that we had to embark on the path to profitability this year itself. ‘Growth with efficiency’ became our theme for this year. This did not mean investing less, but investing better and prioritising more rigorously,” added Raveendran.
BYJU’S 2022: A Year Of Many Challenges
While Raveendran called 2022 a ‘defining year’ for the decacorn, it was nothing short of a disastrous year for the company. As the year unravelled, the startup was in the line of fire for mounting losses and delaying the release of financials.
When the FY21 financials were indeed released after a long gap, it came to fore that the edtech major was saddled with enormous losses and high cash burn. The company saw its losses surge nearly 20X in the financial year 2021-21 (FY21) to INR 4,588.75 Cr compared to INR 231.69 Cr in FY20.
In contrast, total consolidated income fell 3.3% to INR 2,428.3 Cr during the period under review. The aftermath saw many critics including ace investor Shankar Sharma point out questionable accounting practices at the startup.
Afterwards, the startup was also slammed for laying off more than 4,000 employees across its multiple subsidiaries and shutting offices in many cities as it undertook a ‘restructuring exercise.’ This was likely attributed to a funding crunch that was widespread in the Indian startup ecosystem throughout the year.
Inc42 also reported that BYJU’S had also introduced an incentive-linked salary structure and was forcing many to move to Bengaluru or step down.
While it did raise a $250 Mn funding round in October this year to fuel further growth, it also began talks with creditors seeking lenient terms for the $1.2 Bn term B loan it took last year.
As if this was not enough, the startup was also the face of a renewed regulatory scrutiny. The country’s apex childrens’ body National Commission for Protection of Child Rights (NCPCR) summoned BYJU’s executives for mis-selling its courses and pursuing customers who were unable to pay for its products. The startup refuted the allegations and later told the commission that they will not sell courses to families having monthly income of less than INR 25,000.
As the year comes to a close, the startup braces for 2023 as it looks to leave behind a bitter 2022. With negative market sentiment expected to continue for a while longer, it remains to be seen how the next year pans out for the decacorn.
