In a year-end email to staff, co-founder and CEO Byju Ravindran stated that edtech unicorn Byju’s will be opening up more actual tutoring centres and that the company was “working very hard” to become profitable by 2023. While he did not specify a timetable, he had suggested a target of March in October. The Tiger Global-backed company saw its losses increase to 4,589 crores in FY21 from 232 crore the previous year. The leading provider of educational technology has not yet submitted its FY22 financial reports to the Registrar of Companies.
Byju’s has changed its strategy from one of exponential expansion to one of sustainable growth in order to achieve its profitability goal, which it had not anticipated before 2024. “Macroeconomic changes of 2022 meant we had to embark on the path to profitability this year itself,” said Ravindran.
The covenants on its $1.2 billion offshore term loan B were broken since the FY22 results weren’t submitted by September, according to a report from Bloomberg.
The change in approach, however, also required Byju’s to fire approximately 2,500 workers across its product, content, media, and technology divisions. Cost-cutting efforts will certainly improve unit economics and provide the groundwork for the company’s IPO. “The prevailing macroeconomic conditions and the integration of our acquired companies made it (layoffs) inevitable. We shifted our model towards inside sales, which is a result of Byju’s strong brand visibility and deep customer trust,” said Raveendran.
Byju’s recently completed a $250 million rights offering with current investors to fund development. It obtained a 300-crore loan from its fully owned subsidiary Aakash Educational Services via a collateral-free loan. In only 2022, it opened more than 300 physical locations.