Byju, the Indian education startup, released its first results in years, showing that its parent company’s losses have narrowed only slightly, even despite a boom in business it enjoyed during the pandemic. Analysts note the report highlighted the challenges the firm faces as it is locked in a legal battle with creditors over a $1.2 billion loan.
Think & Learn Pvt., the Bengaluru-based online educator’s parent company reported a loss of 22.5 billion rupees ($271 million) for the financial year ending March 2022. One year prior it had reported a loss of 24 billion rupees. Total income grew by over 100 percent, to 35.7 billion rupees.
The results underscored the difficulty Byju is having escaping the post-pandemic slump in business, as it faces other challenges. This year, creditors sued the startup, claiming it breached covenants on a $1.2 billion loan. The conflict focused investor attention on founder Byju Raveendran, who had previously awed investors with his meteoric rise from a tutor to the head of the country’s richest tech startup
Byju spent heavily as demand for its services surged during the pandemic, as schools and universities all went to remote learning to avoid spread of the virus. The company even purchased several companies in the US and other nations, seeking to expand globally.
However as in-person classes resumed, the company’s growth slowed, and the months-long legal dispute, which is only intensifying, has only further worn on the company’s bottom line.
In addition, regulator scrutiny has been growing due to delays in submitting financial results. The delays even led to the resignation of the company’s auditor, Deloitte Haskins & Sells, this year.
In April the company’s Bengaluru offices were raided by plainclothes officials in India who seized the company’s laptops and linked the most valuable education startup in the world to potential foreign exchange violations. In addition, several US-based investors accused the company of hiding half a billion dollars, triggering more lawsuits.
Prosus NV, one of the main investors behind the company, cut the value of its holding in June, pegging the total valuation of the startup at $5.1 billion. Just last year, the company raised additional funding at a valuation of $22 billion.
