Byjus: In five stories: a year of controversy for Byju’s

Byju’s, India’s most valuable startup, has had a torrid 2022 thanks to a series of controversies over its finances, unpaid loans, governance and layoffs, among others.

The ETtech team has closely followed all developments surrounding Byju’s. Here are five must-read stories:

Byju losses reach Rs 4,588 crore in delayed FY21 results

Financial performance of ByjuETtech

After a delay of nearly 18 months, Byju’s released its audited results for the fiscal year ended March 2021 in September 2022. The company readjusted its operating income to Rs 2,280 crore even as it suffered losses massive increases of Rs 4,588 crore, compared to just Rs 262 crore in the previous financial year.

This is a significant drop of 48% from forecast revenue. Byju Raveendran, Founder and CEO of Byju’s, attributed it to business model changes due to the Covid-19 pandemic.

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Co-founder Divya Gokulnath also pushed back against media reports of the company’s delayed FY21 financial statements in a lengthy LinkedIn post.

Byju lays off about 2,500 employees in ‘streamlining’ bid

A month after providing its audited financial statements for FY21 18 months late, Byju announced mass layoffs in October. The company said it would lay off 2,500 people, or about 5% of its 50,000 employees.

Also read: Byju staff reveal harsh working conditions at the edtech giant

Previously, the company laid off at least 600 people from group companies such as Toppr and WhiteHat Jr.

Later, Raveendran acknowledged in an internal email that the firing process was “not as smooth” as the company had expected.

The company, which decided to close and lay off 140 employees at its product development center in Thiruvananthapuram, had to reverse its decision after state government intervention.

Access all kinds of capital to close major multi-billion dollar purchases: CEO

Raveendran told ET in an interview in May that the next 12 months would be the best time to acquire businesses.

“We’re looking at major multi-billion dollar acquisitions…That’s why we have access to all kinds of capital. We are exploring acquisitions in the United States.

Byju’s raises $800 million at a $22 billion valuation

As part of a pre-IPO seed round, the company raised $800 million in new funding in May. Founder Byju Raveendran personally invested $400 million in the round.

In October, Byju’s closed a $250 million funding round from its existing investors, including Qatar Investment Authority (QIA). Tiger Global and Sequoia Capital have also invested in India’s most valuable startup.

A few days later, Byju’s took out a loan of Rs 300 crore from its subsidiary, Aakash Educational Services.

In December, the startup appointed an adviser to restructure its $1.2 billion loan. It also postponed Aakash Educational Services’ billion-dollar enrollment plans.

ICAI, NCPCR probe and more

In November, the Institute of Chartered Accountants of India (ICAI) said it was looking into some “problems” with the company’s financial information.

Lok Sabha member Karti Chidambaram previously raised concerns about the finances of the edtech startup.

Later, the National Commission for the Protection of Children’s Rights (NCPCR) summoned Raveendran over allegations of misconduct by the company’s sales team.

‘Loss after loss’: Parents explain how Byju pushed them into debt

Afterwards, NCPCR President Priyank Kanoongo told ET that Byju would implement an “affordability” test to give parents a better understanding of their financial bandwidth.

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