Founder and CEO Byju Raveendran on Tuesday addressed the challenges faced by the edtech firm, expressing optimism about overcoming them within the next three months, according to people familiar with the matter.
The BYJU’S chief acknowledged that the challenges intensified around June-July, and despite facing the option to give up easily at that juncture, he refused to take the easy way out, the sources revealed.
During a meeting held on December 5 and attended by nearly 50 leaders, Raveendran asserted his commitment to the reconstruction of the edtech company.
BYJU’S India CEO Arjun Mohan shared the edtech firm’s turnaround business plan, highlighting a streamlined workforce with a focus on accountability as its key feature.
Encouraging the team to adopt a “BYJU’S 3.0” approach, he emphasised the strategy of selling the right products to the right audience without solely prioritising sales maximisation.
“BYJU’S 1.0 was offline, while 2.0 was about tech-delivered context. BYJU’S 3.0 will be about deep tech-driven personalisations with the right approach and accountability to sales,” he said.
The meeting comes at a time when the edtech company is fighting various challenges, including a liquidity crunch. During the meeting, Raveendran spoke about the five challenges the company faced in 2023.
First, the litigation surrounding the $1.2 billion Term Loan B, which he said is expected to be resolved after the sale of Epic—a subsidiary of BYJU’S in the US. Additionally, this sale will help in addressing the current liquidity crunch faced by the firm.
The second challenge pertains to an Enforcement Directorate (ED) notice, where Raveendran clarified that it is associated with procedural deficiencies under FEMA, pointing out that the majority of these issues have already been resolved.
The third challenge involves finalising the ongoing statutory audit for FY23—which is on track to be completed soon. Meanwhile, the fourth challenge was the litigation surrounding the Davidson Kempner loan raised against Aakash Educational Services Limited, now been resolved with Ranjan Pai—the Chairman of Manipal Education and Medical Group—taking over the loan.
The ongoing fifth challenge involves addressing resource optimisations to attain profitability at the group level. Raveendran underscored the significance of finding ways to minimise the effects of these reductions on the business and urged each team member to contribute significantly to sustaining business momentum.
Later this month, BYJU’S plans to conduct an Annual General Meeting to deliberate on audited financials of FY22 and discuss other matters. Last month, it released specific financial figures related to its core business as part of the audited financial results for FY22.
BYJU’S core business earned a total income of Rs 3,569 crore in FY22, up from Rs 1,552 crore in the previous year, and the EBITDA loss decreased to Rs 2,253 crore from Rs 2,406 crore in the previous financial year.
The company has not revealed the net loss from its core business and didn’t disclose the consolidated revenue and profit/loss figures for FY22 either.
Recently, it was reported that Raveendran has pledged his home and those owned by his family members to raise money for paying employees.
BYJU’S had earlier said that Mohan is in the final stages of a business restructuring exercise aimed at simplifying operating structures, reducing overall costs, and enhancing cash flow management.
Last month, Ajay Goel, who assumed the role of CFO at BYJU’S in April, resigned from the company following a brief tenure. BYJU’S has since appointed Nitin Golani, previously the president of the company’s financial operations and chief strategy officer at AESL, as its new India CFO.
In recent months, numerous top-level executives have departed from the company. Additionally, BYJU’S has been reducing its workforce on a global and domestic scale. Over the past year, the edtech firm has implemented several rounds of layoffs as part of its cost-cutting measures.
BYJU’S, which rapidly grew through strategic acquisitions, has encountered significant challenges post the pandemic-led edtech boom.
According to experts, the Bengaluru-based firm should adopt a long-term strategy rather than relying on short-term remedies, with an emphasis on identifying and prioritising its core business through the effective use of technology.
Edited by Suman Singh