SUMMARY
Prosus claimed that BYJU’S revenue growth came largely on the back of multiple acquisitions and other enhanced products in the last year
Prosus also revealed that the fair value of its 9.67% stake in BYJU’S stood at $578 Mn at the end of September
BYJU’S had last reported a loss of INR 4,588 Cr in FY21, against an income of INR 2,428.3 Cr during the same period
Amsterdam-based technology investor Prosus has said that its portfolio company and edtech major BYJU’S revenue grew by nearly 90% during the first half of the financial year 2022-23 (FY23).
“BYJU’S revenue grew by almost 90%, mainly off the back of these acquisitions and from enhanced offerings such as BYJU’S FutureSchool, which offers one-on-one learning for coding and maths for kids,” noted the financial report for the period.
This revelation from Prosus comes amidst piling losses at the edtech major. BYJU’S reported losses to the tune of INR 4,588 Cr in FY21, up 1,880% YoY. Not just this, the edtech decacorn is also under spotlight for mass layoffs, firing more than 4,000 employees at its multiple subsidiaries.
This also comes amidst growing scrutiny on BYJU’s over alleged irregular accounting practices. Such has been the furrow around the matter that Institute of Chartered Accountants of India (ICAI) said last week that it was probing financial disclosures made by the edtech player. Other political leaders including Karti Chidambaram have also sought further probe into its corporate governance structures.
This stands in stark contrast with Prosus’ claims in its financial reports that BYJU’s revenue saw a major uptick. Wading in hot waters, the investor claims to have painted an altogether different picture of the reported situation at BYJU’S.
Decoding Prosus’ Report On BYJU’S
By acquisitions, Prosus specified that the edtech decacorn had spent $2.5 Bn in acquisitions in India and abroad ‘during the year.’ While it did not specify the actual time-frame, the investor noted that these acquisitions included Aakash Educational Services, US-based reading platform Epic, kids’ coding startup Tynker and Great Learning, among others.
The numbers posted by Prosus present an interesting picture of finances at the edtech giant. While BYJU’S is yet to declare its results for FY22, the 90% growth in revenues show quite a leap. The startup had reported a nearly 20X year-on-year (YoY) growth in loss at INR 4,588 Cr in FY21, against an income of INR 2,428.3 Cr.
It was not clear what prompted the sudden surge in numbers. But, the startup has, in the recent past, tried to turn around its fortunes by cutting corners and embarking on mass layoffs. The first six months of the current fiscal year saw BYJU’S making deep cuts in its expenses, which still does not explain the spurt in revenue numbers.
The last time around, the edtech major had released its FY21 results after a gap of 12 months.
A Piece Of BYJU’S
The financial report also revealed that the investment group pegged the fair value of its 9.67% stake in BYJU’S at $578 Mn at the end of September, 2022.
“In September 2022, the group lost significant influence in BYJU’S as it no longer exerts significant influence over the financial and operating policies of the entity…The group for its 9.67% effective interest in BYJU’S at fair value through other comprehensive income. The fair value of the BYJU’S investment, subsequent to the loss of significant influence, is $578 Mn,” added the financial report.
This likely pegs the startup at a valuation of $5.97 Bn, a far cry from the mammoth $22 Bn valuation last month on the back of $250 Mn fundraise.
Interestingly, Prosus also began classifying the edtech company giant as a non-controlling financial investment as its shareholding in BYJU’S fell below 10%. Netherland-based Prosus claims to have so far $536 Mn in BYJU’S since 2018.
This comes at a time when the edtech space is undergoing a massive churn with BYJU’S at the centre of it. Amidst mounting losses and no path to profitability, the edtech decacorn has been under intense pressure to streamline its finances.
The aftermath has seen BYJU’S shelve expansion plans and undertake mass layoffs. The startup, through its multiple subsidiaries, has accounted for more than half of the total 7,500 mass firings conducted in the edtech space so far this year.
Not just that, Inc42 previously also reported that the company had dialled down operations in multiple Indian cities, forcing many to relocate to its Bengaluru office. It has been under fire for introducing an incentive-based salary structure which has put the spotlight on the entire edtech space.
Despite all this, BYJU’S continues to be Prosus’ one of the best bets among Indian tech startups. The edtech giant is a key player in a vibrant market that has millions of users with an addressable market size that is projected to reach $10.4 Bn by 2025-end.
