The edtech firm held discussions recently for the shutting down of WhiteHat Jr
BYJU’S spent about $14 Mn a month on the coding platform until now
WhiteHat Jr contributed 26.73% to BYJU’S total loss of INR 1,118.25 Cr in FY21
Update | February 23, 16:30 PM
“At the group level, in accordance with its steadfast commitment towards achieving operational profitability, BYJU’S is constantly evaluating and optimising its business operations towards global growth. As an ongoing activity, we are actively evaluating all our business units to ensure that they are aligned with our path to profitability. Regarding the specific question on White Hat Junior, we have no plans of shutting it down. We are merely optimizing it for organic and efficient growth,” a BYJU’S spokesperson said.
Original Story| February 23 , 12:23 PM
Amid the prevailing funding winter and macroeconomic difficulties, edtech giant BYJU’S is examining the option of shutting down WhiteHat Jr to cut expenses.
BYJU’S acquired WhiteHat Jr in 2020 for $300 Mn. Its founder Karan Bajaj left WhiteHat Jr in August 2021, with Ananya Tripathi being appointed as CEO last year.
While the coding platform has been embroiled in a number of controversies — whether it be for misleading advertising, layoffs, BYJU’S is looking to eliminate a business unit that has drawn considerable criticism to the firm, TechCrunch reported.
Recently, the edtech firm held discussions for the shutting down of WhiteHat Jr. However, it has not reached any decision yet.
BYJU’S, which is taking many cost cutting initiatives, spent about $14 Mn a month on the coding platform until now, the report said quoting sources,
Interestingly, while BYJU’S acquired WhiteHat Jr in 2020 at an enterprise value of $300 Mn, it eventually spent less than $235 Mn on the acquisition deal as a considerable amount of the payout was tied to future growth metrics.
WhiteHat Jr offers live coding, math and music lessons.
In FY21, BYJU’S reported nearly 20X higher losses in comparison to FY20. While much of this was due to changes in revenue recognition by the decacorn, the biggest individual contribution to the loss came from WhiteHat Jr.
With a total loss of INR 1,118.25 Cr in FY21, WhiteHat Jr contributed 26.73% to the total loss of INR 4,588 Cr. This was the second largest contributor to the overall loss after the parent company.
BYJU’S cofounder and CEO Byju Raveendran called WhiteHat Jr the ‘under-performer’ among the bevy of companies in a conversation with Inc42. He added that future growth for WhiteHat Jr is likely to involve high cash burn, even as other acquired companies continue to march towards positive unit economics.
In October 2022, BYJU’S announced that it would be laying off 2,500 employees to attain profitability by the end of FY23. Moreover, the edtech decacorn recently cut hundreds of more jobs citing poor performance of the employees.
Further, BYJU’S is reportedly in talks to raise more than $500 Mn in funding from multiple investors, including private equity group TPG, that can help it avoid potential debt issues.
