India's most valued startup Byju's has attracted attention and it seems due to the wrong reasons.
After months of delay, Indian education company Byju's finally reported its audited results for the financial year ending March 31, 2021.
According to reports, its losses have swelled nearly 15 times to over Rs 4500 cr from the same period a year before. This even as revenues stayed roughly flat at Rs 2200 Cr. This means that Byju’s lost Rs 12.50 Cr every day of the financial year.
The company's co-founder and CEO Byju Raveendran said that there was an impact of revenue recognition changes, which is recognition of streaming revenue over the period of consumption and credit sales, and EMI sales getting recognised after complete collection.
Owing to the pandemic, the auditor said BYJU’s faced hardships not only in terms of business operations but also in implementation and operating effectiveness of certain internal controls over financial reporting.
Not only this, RPG Enterprises chairman Harsh Goenka and Biocon executive chairperson Kiran Mazumdar-Shaw commented at Byju's balance sheet. Goenka took to Twitter and wrote, “Byju’s revenues - 2,280 crore; Byju’s losses- 4,588 crore (increases 17 times). That means you give me Rs 1 and I will return Rs 2. Valuation- $22 billion (number 1 among startups). Hottest sector to invest- edutech. Nothing is making sense to me! Can anyone explain please?”
Soon after Goenka tweeted, the Biocon boss said that these valuations are like virtual reality and don't stack up.
The startup's financial challenges have reignited worries about India's consumer technology sector, where big competitors' public valuations, including those of Zomato Ltd. and Paytm, have fallen precipitously this year.
Following a decline in technology valuations, the company's plan to list on a US stock market through a merger with a special purpose acquisition company is "on complete pause".
Not only this, a lot of complaints like hard-selling courses, poor study material, pushing financing options and frustrating refund processes have been pilled up Byju's.