Byju Raveendran, co-founder and CEO of BYJU’S, spoke to BusinessLine about the company’s business performance and the plans ahead. Last valued at $22 billion, BYJU’S reported ₹2,428-crore gross revenue in FY21 and its losses ballooned to ₹4,588 crore which is almost 20 times of its ₹231-crore losses in FY20. He attributed the jump in losses to changes in revenue recognition, because of which more than 40 per cent of the company’s revenue got deferred from FY21 to subsequent years. 


In comparison to FY21, you have noted a significant jump in unaudited revenue for FY22 (10,000 crore). Is there a lesser impact of revenue recognition changes in FY22?

In FY22, EMI sales were actually lower compared to FY21. During Covid, NBFCs and banking partners had slowed down on loan approvals and it was the year when users needed loan support more than ever before. So we took a very compassionate stance in terms of extending EMI-based sales in FY21 but those sales are much less in FY22. Also, there will be a much bigger impact on the profitability side because it is only revenue getting moved out and not the expenses. 


How has been the performance of your multiple acquisitions?

Tutorial chain Aakash Educational Service and upskilling platform Great Learning have doubled their revenues since acquisition. Both the acquisitions are outperforming. In the case of K12-focused WhiteHat Jr. (it) has a challenge in terms of student acquisition cost. That is where we are going for slower organic growth, so I will say it is underperforming. 


Many edtech companies have taken cost-cutting measures due to funding slowdown. Has there been any changes at BYJU’S as well? Are you too focused on profitability now?

Last two years, we focused on only growth, now with the macro environment changing, the renewed focus is on efficient growth. The good part is that most of our businesses are  high margin businesses like BYJU’S, Aakash and Great learning. There are some new businesses which flourished during Covid and now need some structural changes to achieve profitability. But that’s not a big challenge. It will only take a few quarters for us to become cashflow positive in every large business which we operate in.


Is there any update on the investment commitments made by Sumeru Ventures and Oxshott Capital in the company’s recent $800-million round? Have their share of investments come in?

We have to get around $300 million funding from Sumeru and Oxshott. The funds have not come yet and the chances look slim now. The remaining $500 million has come in, which was invested by Vitruvian Partners and some other investors along with my personal investment. When suddenly the macro environment changed, Sumeru and Oxshott were not able to fund anything. They have signed similar documents with many other unicorns in India but no one has received the money. 


Given that Oxshott and Sumeru’s investment has not come in, will you be raising a new round of funding? 

We have always raised money when we don’t need it because that’s how you raise money on your terms. So that is an ongoing process. For the last six months, we have not focused on fundraising because of the audit delay etc. But now investment conversations are in advanced stages and you can expect an announcement soon. 


Have you closed the payments for Aakash Educational Services acquisition? Has it been pending because of financial constraints?

The deal is closed from every angle, other than some payment that we have to make to Blackstone. It is pending because there is an RBI guideline which both of us need to comply with. As a non-resident shareholder, we cannot pay more than the fair market value to Blackstone. So we are waiting for some kind of growth to happen in Aakash. So, delaying it by three months helps us meet that objective. 

This delay is not because of any financial constraints. Aakash is a billion-dollar acquisition, of which only 20 per cent is remaining. We are well capitalised and have much more than a billion dollars in the bank. It is our best performing acquisition, so it will be foolish for us to not own 100 per cent of Aakash. 


Are you looking at new acquisitions currently?

Right now, the lookout for acquisitions is on pause because we have given an offer to the company we are interested in and are now waiting.  We are focusing on integrating the existing acquisitions, but I am not ruling out new acquisitions because a lot of times we do get a lot of inbound interest from founders. However, currently we are not looking at any new acquisition.


Is there an update on Byju’s IPO plans?

No one is going public now, public markets are literally shutdown currently. Everyone is waiting for the macro to improve. So we have pushed our IPO by 9 to 12 months like many other companies that have announced plans to go public. We will wait and watch and then look at a dual listing in India and the US.