Byju's Loss Widens 13-Fold In FY21 Even As 40% Revenue Is Deferred
Byju's reported a loss of Rs 4,588 crore in FY21 from Rs 262 crore a year earlier. At Rs 2,430 crore, revenue was little changed.
Byju's loss widened thirteen-fold in the fiscal ended March 2021, its much delayed audited financial statement showed, even as India's most valuable startup boosted spending to bolster growth.
Think & Learn Pvt. Ltd., the parent company of Byju's, reported a net loss of Rs 4,588 crore in FY21. At Rs 2,430 crore, revenue was little changed from the previous 12 months.
The company, in a statement released on Wednesday, said that there was significant business growth in FY21 over FY20, but 40% revenue was deferred due to “covid-related business model change”. Byju's said it has received an unqualified report for FY21 from its auditor, Deloitte Haskins & Sells. "The rationalised growth between FY21 and FY20 is a result of the changes made in the way Byju's recognises its revenue, as advised by its auditors."
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 audit delays were initially on account of multiple acquisitions; later, the auditors changed the revenue recognition model so that meant reworking the revenues,” Byju's founder and CEO Byju Raveendran said in an interview to Bloomberg. “Lastly, because of the attention our audit got in the last three months, Deloitte went deeper into the numbers. The numbers have been passed without conditions.”
Byju’s has been under regulatory pressure to report financial statements after missing a deadline for doing so by several months. The company has also faced delays with securing more funding and completing a planned merger with a special purpose acquisition company in the U.S. after a global technology rout hit valuations.
The accounting changes mean Byju’s now recognises revenue when subscribers actually submit their recurring payments, rather than upfront, Raveendran told Bloomberg. Based on unaudited numbers, FY22 sales increased fourfold to almost Rs 10,000 crore. In the following four months, revenue reached Rs 4,500 crore and sales are set to grow at a more than 50% this year, Raveendran said.
Byju’s was most recently valued at $22 billion, according to CB Insights. Earlier this year, Byju’s struggled to close a funding round of $800 million.
After spending more than $2 billion on acquisitions since the start of the pandemic, Byju’s will now take “a measured approach” toward takeovers, Raveendran said. Still, he said potential targets are set to become more attractive in the next 12 months. About 25% of Byju’s revenue comes from outside India, he said.