Byju’s Releases Delayed Audit Report Showing Large Losses in 2021

Staff Writer
India's ed tech market, edWeek market brief

Byju’s’ long-awaited audit report was released last week, with reports stating India’s ed-tech giant lost $577.4 million in fiscal year 2021, a huge jump from $32.9 million in losses the previous year.

In an interview with TechCrunch last week, Byju’s Founder Byju Raveendran attributed the delay in releasing an audit conducted by Deloitte to the pandemic and the financial complexities caused by his organization’s slew of acquisitions in 2021.

He also said gross revenue in fiscal year 2022, which ended in March, was nearly $1.3 billion, and the company brought in $570 million between April and July. Those figures have not yet been audited.

Byju’s did not respond to a request for comment from EdWeek Market Brief.

The long process to release 2021 data drew the attention of lawmakers in India, where Byju’s is based. The country is home to one of the most closely watched ed-tech markets globally, with venture capital investments reaching nearly $4 billion in 2021, according to data from research and intelligence firm Holon IQ.

The company is one of the most highly valued ed-tech startups in the world with a $22 billion valuation. It has raised almost $6 billion from backers including Blackrock, UBS, Sequoia Capital India, Chan Zuckerberg Initiative, and Owl Ventures, among others.

In March, Byju’s said it raised $800 million, with Raveendran investing $400 million himself, using loans backed by his stake in the company. The founder told TechCrunch the company has not yet received $250 million of those funds from Sumeru Equity Partners and Oxshott Capital Partners.

In July, India’s Department of Consumer Affairs warned a group of ed-tech companies in the country against engaging in unfair trade practices, such as false advertising, citing a report that found education companies were the largest violators of its advertising laws. The government, in a meeting that included Byju’s and other ed-tech providers, said in a statement it would consider new guidelines to increase transparency if the business practices didn’t improve.

Founded in 2011, Byju’s seeks to deliver online lessons with video, animation, quizzes, and interactive simulation for students in grades 4-12 in math and science, and it says it has plans to expand to other subjects. Its learning app is designed for mobile devices, and students access the platform via tablets or smartphones.

A Force in Ed-Tech M&A

While Byju’s is eyeing an IPO in either India or the U.S. in the next year, the company is currently private, which makes Byju’s disclosure of any audit reports rare, said Matthew Tower, principal at Workshop Venture Partners and a long-time ed-tech investor who has followed Byju’s story in his Ed Tech Thoughts newsletter. 

He’s hopeful now that the speculation is over and with Deloitte having signed off on the report, Byju’s focus can return to the day-to-day work of growing the company, especially through acquisitions that help drive the growth of the overall ed-tech market.

“M&A is a really healthy part of the startup ecoystem. It’s what provides investors with exits and provides founders and employees with liquidity,” said Tower. He added that Byju’s had a “more limited capacity” to make acquisitions while they were dealing with the audit report issue.

In combination with the broader venture capital market’s downturn this year, scrutiny of Byju’s financial results has likely led to investors taking a slightly more conservative outlook, Tower said, as they reassess potential exits for portfolio companies.

Byju’s made three major purchases in 2021. It acquired Great Learning for $600 million, Epic for $500 million, and Aakash Educational Services for $950 million. Byju’s previously bought WhiteHat Jr. for $300 million in 2020, Osmo for $120 million in 2019.

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