Mounting losses meant that the startup has had to streamline its finances, including laying off employees and closing several branch offices
BYJU’S recorded a 20X jump in losses to INR 4,588 Cr in FY21 on the back of INR 2,251 Cr worth of advertising and promotional expenses
Critics have previously argued that the funding crunch has only affected BYJU’S employees and not its branding campaigns
Indian edtech major BYJU’S, which has been on the Indian men’s cricket team jersey since 2019, is seeking to exit the deal after March 2023 and will cut its deal with the Board of Control for Cricket in India (BCCI). According to an ET report, with the current development, BYJU’S is looking to rationalise its media expenditure.
According to an Insidesport report, BCCI has confirmed the development. “Yes, they have written to us they want to exit jersey sponsorship. The matter will be discussed at an apex council meeting. They need to comply with all contractual obligations and exit can be taken,” the report quoted a senior official.
The entire edtech space has been undergoing a massive churn and BYJU’S has been at the centre of it. Among other pressures, mounting losses meant that the startup has had to streamline its finances.
It had recently announced plans to lay off 5% of its workforce (nearly 2500 employees) and shut down its branch offices and centres in nearly 60 Indian cities.
What followed the layoffs was a criticism of its marketing and promotional expenses including signing celebrities for brand endorsements (the most recent one being Lionel Messi’s) and sponsorship deals for BCCI and the FIFA World Cup. Critics have argued that the funding crunch has only affected BYJU’S employees and the unicorn continues to spend big on branding campaigns.
BYJU’S is also an official sponsor of International Cricket Council (ICC) events.
But the Bengaluru-based edtech is not alone. In the past few years, several well-funded edtech startups such as Unacademy and Vedantu have also splurged on branding via cricket properties.
The heavy scrutiny on BYJU’S is a result of the mounting losses. The Byju Raveendran-led startup recorded a 20X jump in losses at INR 4,588 Cr in FY21 from INR 231.69 Cr in FY20.
Its revenue from operations stood at INR 2,428.3 Cr in FY21- a 3.3% drop from INR 2,511 Cr in the previous year. Its advertising and promotional expenses had jumped 150% to INR 2,251 Cr from INR 899 Cr in FY20.
Total expenses rose to INR 7,027.4 Cr in FY21 – a 1.5X increase from INR 2,873 Cr in FY20.
While it is not officially disclosed, BYJU’S paid nearly $40 Mn for the FIFA deal and $55 Mn for the extension of its BCCI jersey deal from March 2022 to March 2023.
