The World’s Most Valuable EdTech Firm Byju’s Racks Up Wider Losses Amid Expansion

After months of delay, Byju’s—the edtech giant cofounded by entrepreneur Byju Raveendran—finally reported its financial results for the year ended March 2021.

They reveal mounting losses at India’s most valuable unicorn, to the tune of 45.6 billion rupees ($573 million) from 3.1 billion rupees the previous year, as the company’s operating expenses more than doubled. Revenue slipped 3% to 24.3 billion rupees in the same period. After reports suggested that the results were delayed due to differences with the auditor, Bangalore-based Byju’s deferred the recognition of almost 40% of revenue on the advice of its auditors.

“Clearly Byju’s needs to take corrective action on several fronts but on revenue recognition, it is not uncommon for an entrepreneur and an auditor to have different interpretations on how revenue should be recognized,” says serial entrepreneur K. Ganesh.

While Byju’s growth has been bolstered by increasing demand for online education, particularly during the pandemic, the company has also been expanding rapidly through acquisitions, snapping up 15 companies across India, Asia and the U.S. in the past six years.

Since 2021, the company has spent $2.6 billion on acquisitions, including $950 million for Indian test-prep provider Aakash Educational Service and $600 million for Singapore’s Great Learning. “Byju’s acquisitions across segments over the last year have seen substantial growth,” the company said in a statement. “Aakash in the test-prep segment and Great Learning in the higher education segment have doubled their revenues since the acquisition.”

Despite growing criticism over this buying spree, Divya Gokulnath, who runs the company with her husband, cofounder and CEO Byju Raveendran, says the company is careful with its spending. “We don’t spend just because there is capital,” she said in an interview published by  Forbes Asia in June

The company is reportedly bidding aggressively to acquire Nasdaq-listed 2U, valuing the firm at roughly $2 billion, more than three times its current market cap of $600 million. At the same time, it’s planning organic growth, aiming to scale up in India by expanding its network of tuition centers to 500 locations by the end of the year from the more than 200 it currently has, while doubling its headcount of teachers to 20,000.

Raveendran offered test-prep services before launching Think & Learn with his wife in 2011 and his eponymous tutoring app. The couple’s net worth is $3.5 billion, according to Forbes’ Real-Time Billionaires list. This was based on the company’s last funding round in March when it was valued at $23 billion. Byju’s raised $843 million in its last funding round, including nearly 400 million contributed by Raveendran personally. Reportedly, a promised $150 million from an investor hasn’t been received so far. It has attracted marquee investors like Facebook founder Mark Zuckerberg, China’s Tencent and U.S. private equity General Atlantic.