Beleaguered edtech giant BYJU’S is targeting profitability by March 2024 on the back of a significant restructuring in the company, consolidations, and possible settlement of its $1.2 Bn term loan B (TLB).
As per a PTI report, the business restructuring, aimed at matching resources with cash flows, would lead to BYJU’S achieving break-even by the forthcoming March – the fourth quarter of FY24.
It’s worth noting that according to sources who spoke with Inc42 last week, BYJU’S is expected to lay off about 4,000 employees in the coming weeks. This move is part of the company’s ongoing restructuring efforts, which have been necessitated by a significant liquidity crisis.
Interestingly, the startup had initially set its sights on achieving profitability by March 2023. However, this goal became increasingly elusive this year, largely due to its $1.2 Bn term loan B (TLB). The company has faced a series of setbacks, including the departure of key investors from its board and the loss of Deloitte as its auditor due to deferred FY22 financial statements, all of which have added to its challenges.
As we approach the midpoint of FY24, BYJU’S still has not disclosed its financial results for FY22. Although the company had aimed to release these figures by September 2023, it has not met that target.
While sharing the FY21 financials, CEO Byju Raveendran had indicated that the company had generated a gross revenue of INR 10,000 Cr in FY22. However, these claims remain unverified until the official financial statements are released.
After a long delay, the company had released its FY21 financial statements in September last year when its loss surged 19.8X to INR 4,588 Cr.
Selling Businesses To Settle TLB Repayments
Meanwhile, BYJU’S has been finding various means to settle its TLB. After much mud-slinging and court battles, the company recently offered to pay back the entire loan to its lenders within six months.
To meet the cash requirements for repayments, BYJU’S has reportedly put two of its subsidiaries – EPIC and Great Learning – on sale to raise around $800 Mn-$1 Bn. However, the latest PTI report suggests that the money raised through the sale of EPIC might meet the requirement.
BYJU’S now wants to dispose of it within 150 days. The response from its TLB lenders regarding this proposal is still awaited.
Besides, the company is now also looking towards a consolidation of 31 entities under it to optimise management bandwidth, the news agency noted.
In the middle of all this, BYJU’S is also set to rebrand one of its fully-owned subsidiaries WhiteHat Jr as ‘BYJU’S Future School’, which will lead to the complete integration of the entity’s assets into various business verticals, including the holding company, Think & Learn Private Limited.
In an attempt to improve its books, BYJU’S has put a pause on campus hirings too.
Exits Make It Tougher
Amid the ongoing trouble, the edtech decacorn saw multiple exits from the leadership team, including the departure of chief business officer Prathyusha Agarwal, the business head of BYJU’S Tuition Centre Himanshu Bajaj, CEO of Aakash Educational Services Abhishek Maheshwari, and others.
On the other hand, it appointed former Infosys executive VP and HR head Richard Lobo as an exclusive advisor to transform its HR function. BYJU’S also hired former upGrad CEO Arjun Mohan as the CEO of its international business.
Recently, Mohan was appointed as the head of BYJU’S India business, succeeding Mrinal Mohit.
After Peak XV Partners’ GV Ravishankar, Russell Dreisenstock of Prosus, and Vivian Wu of Chan Zuckerberg Initiative – tendered their registrations from the company’s board, the company appointed former SBI Chairperson Rajnish Kumar and ace investor TV Mohandas Pai also joined as members of BYJU’S advisory council.
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