With a loss of Rs 4,588 crore, Byju's FY21 report card has many red marks

Byju’s, the education technology company that is India’s most-valued start-up, said on Wednesday that it had earned Rs 2,428 crore in revenues in the financial year 2020-21 (FY21) and incurred a loss of Rs 4,588 crore. The revenues are 3 per cent lower than the figure in the previous year — a dampener because start-ups are judged on growth and expansion — and the loss has vaulted 15 times from Rs 300 crore in 2019-20.

The results have been a subject of intense scrutiny, coming 18 months after the period of coverage ended in March 2021 and prompting the Ministry of Corporate Affairs to ask the company to explain the delay. Byju’s did not keep to three or four deadlines, all self-imposed, for announcing its results, reportedly because its auditor was not signing off on the accounts. It said in a press release on Wednesday that the FY21 numbers had received an unqualified report from the audit firm, Deloitte Haskins & Sells.

In an interview with Business Standard, the company’s founder and CEO, Byju Raveendran, said there was significant business growth in FY21. But, since this was the first year when new revenue recognition started because of a Covid-related change in its business model, almost 40 per cent of the revenue was deferred even as expenses were not. 

“Otherwise, the growth would have been 60 to 65 per cent. For the revenue that got pushed, the expenses are already accounted for in FY21, so the loss has increased,” said Raveendran.

Sources say Raveendran briefed shareholders and board members on the difference between projected revenues and the audited numbers. The discussion included BlackRock, Sequoia Capital, T Rowe Price, and General Atlantic.

Byju’s also bore the impact of high-voltage acquisitions that have yet to start showing up as assets on the balance sheet. “This was the year when acquisitions increased -- fast-growing but loss-making acquisitions that are increasing the loss at the consolidated level,” Raveendran said.

Raising hopes for the subsequent year, 2021-22, the company disclosed unaudited results that show nearly Rs 10,000 crore in gross revenues. Its K-12 education business is showing rapid growth. The firm said it logged revenues of Rs 4,530 crore between April and July this year.

Byju’s went on an acquisition spree in India and outside as the Covid-19 pandemic accelerated the adoption of online education. Some of these deals included the $1 billion purchase of New Delhi-based Aakash Educational Services and the $600 million acquisition of Singapore-headquartered Great Learning, a leading player in professional and higher education.

Two other large deals were the acquisition of United States-based digital reading platform, Epic, for $500 million and of Mumbai-based WhiteHat Jr, which teaches coding to children, for $300 million.