BYJU’S plans to raise via funding $100 million to $200 million via a rights issue at a much lower valuation of $2 billion, a nearly 90% reduction from its peak valuation of $22 billion in 2022.
Nevertheless, BYJU’s India’s chief financial officer (CFO), Nitin Golani, told PTI that the edtech startup plans to raise via funding $7 billion to $8 billion through its upcoming rights issue in February.
Several brands in the company have also seen an increase in valuation. If you combine the valuations of all the businesses, you will be looking at a minimum of around $7- $8 Billion,” Golani said.
Following the release of its financial statements for FY22 after a delay of nearly two years, BYJU’s losses rose 81% YoY to INR 8,245.2 Cr, while revenues increased 120% YoY to INR 5,014.6 Cr.
His rationale for the ‘significant’ increase in revenue was that Aakash was acquired at a time when its revenues were around INR 1,000 Cr. As a result, the coaching arm is now valued at $2 Bn from $1 Bn, after scaling its revenues to INR 2,700 Cr.
Aakash, the startup’s cash cow, saw its profit increase by 82% YoY to INR 79.5 Cr in FY22 as revenues crossed INR 1,400 Cr.
The CEO also claimed that Great Learning, which BYJU’S acquired for $600 Mn funding (INR 4,989 Cr at present exchange rates), increased its bottom line to INR 900 Cr – 1,000 Cr from INR 400 Cr at the time of acquisition, leading to a significant increase in its valuation.
Nevertheless, WhiteHat Jr and OSMO, which piled on the losses, dragged the company down even further. According to Golani, BYJU’S has made 13 acquisitions over the past couple of years that have not resulted in the company’s expected returns. In addition, he said that the Bengaluru-based edtech firm has ‘significantly curtailed spending’ on WHJ and OSMO.
During FY22, WhiteHat Jr’s loss before tax rose sharply from INR 1,549 crore to INR 2,877 crore, while OSMO’s loss before tax surged 58% YoY to INR 946 crore.
As these subsidiaries continued to lose money, the auditor flagged them for borrowing huge sums from Think & Learn in FY22 results. In addition, BYJU’s other subsidiaries are said to have obtained loans at lower interest rates than market rates and not have followed the Companies Act, 2013.
By the end of FY22, BYJU’s had a long list of due receivables amounting to INR 3,800 Cr, whose final status is unknown.
BYJU’s valuation was also slashed to less than $1 Bn in November by Dutch VC firm Prosus, shortly after BlackRock cut its valuation to less than $3 Bn.
Over issues surrounding its $1.2 Billion Term B loan payments and delays in filing financial statements, three external board members of BYJU resigned in June 2023 en masse. GV Ravishankar, Russell Dreisenstock of Prosus, and Vivian Wu of Chan Zuckerberg Initiative were among the members.
As a result of mounting losses, BYJU’S has begun a mass restructuring process at its group companies. According to Inc 42’s layoff tracker, the edtech giant has laid off more than 5,000 employees in the past two years, resulting in mass layoffs and shelving expansions. In the meantime, Golani said the company plans to release its FY23 results before the proposed rights sale.
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