Indian education startup Byju’s, which is currently embroiled in a debt dispute with creditors over a $1.2 billion loan, has reported a loss of Rs 2,250 crore ($271 million) at an operational level for the financial year ending in March 2022. This represents a marginal improvement from the previous year’s loss of Rs 2,400 crore. However, the company’s total income more than doubled to Rs 3,570 crore.
These latest results highlight the challenges faced by Byju’s, once considered a shining example of India’s thriving startup economy, as it struggles to recover from the impact of the COVID-19 pandemic. The company faced legal action from creditors after breaching loan covenants, which has put its founder, Byju Raveendran, in the spotlight.
During the height of the pandemic, Byju’s witnessed a surge in demand for its online tutoring services as schools and universities were forced to close. The company took advantage of this by aggressively expanding its operations, including acquiring several firms in the US and other countries, and even sponsoring India’s national cricket team.
However, as classes resumed, Byju’s growth rate began to slow down, and the company’s troubles were further compounded by the ongoing legal dispute with creditors. The delay in submitting financial results led to regulatory scrutiny and the resignation of Deloitte Haskins & Sells as the company’s auditor. In April, Indian officials raided Byju’s offices in Bengaluru, seizing laptops and raising concerns over possible foreign exchange violations. Additionally, the company faced lawsuits from US-based investors who accused Byju’s of concealing $500 million.
One of Byju’s major investors, Prosus NV, devalued its holdings in June, resulting in Byju’s total valuation dropping to $5.1 billion. This is a significant decrease from the $22 billion valuation the company achieved just last year.
These results indicate the challenges faced by Byju’s in recovering from the pandemic and resolving its debt dispute. The company’s reputation has been tarnished, and it will need to find a way to regain investor confidence and restore its position as a leading edtech startup in India.
