Byju's Financial Troubles: No End In Sight
In its last audited results, after missing timeline to close funding, Byju's net loss widened to Rs 4,588 crore in FY21.
Education startup Byju's is facing fresh financial troubles. The Enforcement Directorate conducted searches at two of its Bengaluru offices and one residence, alleging questionable foreign remittances by the company.
Think & Learn Pvt. Ltd., Byju's parent company, has failed to prepare and get its financial statements audited since fiscal 2021, raising doubts on "the genuineness of the figures provided by the company," according to the Enforcement Directorate.
"The company has booked around Rs 944 crore in the name of Advertisement and Marketing expenses including the amount remitted to foreign jurisdiction," it said adding that the genuineness is being cross examined from banks.
In its last audited results, after missing the timeline to close funding, the company's net loss widened to Rs 4,588 crore in FY21. Last valued at $22 billion, Byju's has stated its top priority has been to achieve profitability by March 2023.
The edtech startup blamed the performance on changes in accounting practices that led it to defer revenue to subsequent years. It also released the unaudited numbers for FY22 and the following four months showing significant sales growth.
The edtech company's revenue recognition practices underwent a major shift. Instead of booking multi-year revenues all at once, it will now recognise revenues only as and when they come in. This after its auditor Deloitte Haskins & Sells asked for the change following a long delay in the finalisation of its FY21 audit.
The company, in October last year, announced, 2,500 job cuts in an attempt to meet its target to achieve profitability. It also said that it would reduce its marketing budgets domestically and prioritise spending "to increase brand awareness in overseas markets."
