BYJU’S Catch-22


New CEO Arjun Mohan has been given the charge to revive the edtech giant. Can the new leadership save BYJU’S?

September 14, 2022: BYJU’S releases its long-awaited FY21 numbers, showing losses of INR 4,588 Cr, 20X higher compared to the previous year.

More than a year later, BYJU’S has yet to file its financials for FY22 and we are currently nearly halfway through FY24, even after committing to release them by September 2023.

This week, besides being in the limelight for looking to sell some of its acquired businesses, and non-payment of dues to sacked employees, BYJU’S also announced a leadership overhaul with a new CEO for the India business.

Just a couple of months after rejoining BYJU’S, Arjun Mohan has been given the charge to revive the edtech giant. Can this new leadership fix the many problems at BYJU’S and its reputation not just as a business but also as an employer?

We’ll try to answer this question, but before that take a look at these top stories from our newsroom this past week:

  • Fixing Education Loans: Startups specialising in education loans have a lot to fix, including flawed underwriting models and unethical lending practices. Here’s a deep dive into why the industry needs an overhaul ASAP
  • Rise Of Spacetech: With over 150 startups in the spacetech sector and investor interest at its peak, India is rapidly emerging as the next big innovation hub for aerospace and satellite tech
  • Y Combinator & India: The famed early stage accelerator has seemingly dulled its focus on India, with just six Indian startups getting the YC tag in the Summer 2023 batch. What explains this drop?

New CEO, New Era For BYJU’S?

There’s no shortage of fires to fight for BYJU’S new India CEO Arjun Mohan. The former upGrad CEO replaces Mrinal Mohit, who previously led the India business and was also the chief operating officer for a while.

Mohan’s elevation to CEO completes a journey that began with BYJU’S at inception. He was the CBO of the company for 11 years before joining rival upGrad as CEO. He rejoined BYJU’S in July this year as the head of international business and now has been given charge of the India business.

The CEO’s position was left vacant for several weeks after Mohit’s exit, and Mohan’s past experience working with the BYJU’S cofounders is certainly a positive. But the leadership does not have too much time to turn things around. Besides Mohit, BYJU’S has seen resignation of board members and other high-level exits.

BYJU'S Sees Key Leaders Exit In 2023

In nutshell, BYJU’S has five major problems to tackle:

  • Unpaid employee dues and ongoing cost-cutting
  • Potential fire sales of acquired companies to repay debts
  • Delay in audited financials for FY22 and FY23
  • Settling $1.2 Bn Term Loan B
  • And finally, the most critical – rebuilding the business after the exodus of key leaders

And that’s not even counting the problems related to revenue growth and profitability in the core business.

To its credit, BYJU’S formed a new advisory committee featuring former SBI chairperson Rajnish Kumar and former Infosys CFO Mohandas Pai to appoint new board members. But that has not stopped the tide of problems.

Mohan coming in represents a new era for BYJU’S, but some of his biggest challenges are problems that have been around for years.

Where Are The FY22 Financials?

The first big task for Mohan would be to shepherd the company through the myriad problems.

The release of BYJU’S FY22 financials, which were supposed to come this month, as per the company’s past claims, will be critical. But so far this still remains hanging in the balance.

Last year, the company claimed it would post gross revenue of INR 10,000 Cr in FY22, but since then the only news about financials from BYJU’S has been related to the delays and the explanations for the same.

BYJU’S did not respond to questions about the audited financial results, and we will update this story if the company sends us an update on the same.

Without audited FY22 numbers, it’s hard to see how BYJU’S will get out of its current financial mess. Its former auditor Deloitte resigned due to lack of faith in getting the information required to audit the books, and this raises a lot of questions about the books and financial situation of the company.

If, indeed, it has to accelerate its TLB repayment, it will need to sell assets or raise more funds from other investors, and the latter option seems rather bleak right now.

While the company is said to be in talks to raise this amount, it’s not clear who might invest in BYJU’S at present, given the delay in its audited financials and the lack of confidence of some of its key investors such as Prosus andPeak XV, who quit board positions earlier this year.

Sources told us at the time that the board members had lost faith in the management due to breakdown in trust and communication between them and BYJU’S cofounder and CEO Byju Raveendran. Will the entry of Mohan cause a thaw in the relationship between BYJU’S and its key investors?

To make the governance matters worse, BYJU’S defaulted on an interest payment to its TLB lenders. Further it also violated an agreement with US-based investment fund Davidson Kempner (DK) over borrowed funds. Now, BYJU’S and its TLB lenders are locked in legal battles in the US, while DK is looking to take control of BYJU’S acquired test-prep giant Aakash.

In both cases, the company is mulling out-of-court settlements and has proposed repayment terms to its lenders multiple times. However, even if these issues are settled, BYJU’S will need a lot of capital to repay the loans.

In many ways, it’s stuck in a catch-22 situation — repaying the loans by selling assets, but then it would be selling off its most lucrative assets.

Unplanned Acquisitions Bite BYJU’S

This brings us to the question of why BYJU’S finds itself stretched and in this position in the first place. Many might point to the expensive acquisitions and their lack of profitability like in the case of WhiteHat Jr. But there’s also the fact that these acquired companies were merely standalone pieces within BYJU’S, even several months after bedding in.

BYJU’S just did not have a plan to integrate large acquisitions like Aakash, claim investors we spoke to.

“The deal all hinged on debt and it’s not clear whether the business could do justice to the loans it took to buy these companies. It’s a company with a $22 Bn valuation, and the investors don’t know anything about its financial performance. It’s unimaginable,” says one Mumbai-based angel investor, who did not wish to be named.

The new CEO has his work cut out in this regard. BYJU’S reputation has taken a beating and most of its backers have shown some displeasure around how things have progressed.

Mohan has to fix the image, but also not overlook the business, which has taken a backseat amid the financial and corporate governance shenanigans.

Reports indicate that BYJU’S tuition centres have seen close to 60% refund requests out of 75K subscriptions in the past two years, as of August 2023.

No Focus On The Business

The online learning (tablet-centric) business had already slowed down since the lifting of the pandemic restrictions on schools, and BYJU’S bet on hybrid learning to grow. But this has seemingly not worked for the company, which has had to cut costs across several areas, including cancelling SaaS subscriptions and vacating office space.

It acquired Aakash for $1 Bn and Great Learning for $600 Mn, and these are the biggest contributors to the cash flow for BYJU’S. Selling Great Learning will actually significantly impact BYJU’S and only serves to delay BYJU’S larger problems around its unprofitable core business.

Aakash, which has incidentally also not reported its financials in the past two years, is eyeing a 2024 IPO. But BYJU’S shaky situation with lenders has led to some problems for Aakash too. The IPO plans are certain to be pushed back several months, and indeed Aakash could slip out of BYJU’S hands if the deal falls through.

To make matters worse, the primary competition in hybrid edtech has grown stronger and improved unit economics in the past 12-16 months. PW launched 26 new centres last month, while Unacademy claimed to have seen its first cash flow positive month in June this year.

BYJU’S has gone from crisis to crisis, and the only real business-related updates came in the form of the restructuring from four separate verticals to two.

Now, Mohan needs to bring the focus back to the business fundamentals, the progress in that regard and away from questions about whether the company was acting in bad faith with lenders. Another investor told us that it’s never a good thing when conversations in public are about loans and lenders.

In other words, losses are bad, but, at least not as bad as not repaying a loan. BYJU’S needs to bring the conversation back toward the business. Mohan has a huge challenge in front of him, even though right now the priority is settling the problems related to the lenders. Can a new CEO save BYJU’S business from sinking any deeper?

In Focus: Startup FY23 Financials

When one looks at the cold hard facts, much of the talk in the Indian startup ecosystem around sustainable business models, improved unit economics and profitability starts to fade away.

Inc42’s latest tracker new-age listed tech giants and startups in India have released their FY23 financials, the performance figures offer a cautionary tale. The 33 companies added so far in the tracker cumulatively reported operational revenue of INR 64,272 Cr, but what is the proportion of loss-making companies to profitable ones?

To find out, head to the Inc42 Startup Financials Tracker

Sunday Roundup: Startup Funding, Tech Stocks & More


  • Funding Drops Again:  After a strong opening to September, startup funding has fallen off pace, with a total of $91 Mn raised in the past week, which took the year’s funding tally to $7 Bn
  • EV Subsidies Under Scrutiny: Electric vehicle industry body SMEV has alleged that the FAME-II subsidies have favoured loss-making OEMs instead of small manufacturers
  • Zaggle’s Flat Listing: Fintech SaaS startup Zaggle made its stock market debut this past week at a listing price of INR 164 per share, level with the issue price


  • Swiggy Price Bug? After users accused Swiggy of overcharging customers, the foodtech major claimed a technical bug had inflated bill prices for some customers
  • Tech Stocks Caught In Political Battle: India and Canada’s war of words has stopped the rally of Zomato, Paytm and other tech stocks this week


That’s all for this week. Join Inc42 on Instagram, X/Twitter and LinkedIn for the latest news as it happens.

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