.png)
How did Byju’s go from being a success story to a scandal?
The Company, Founded By Byju Raveendran In 2007, Started As A Passion Project To Transform The Way Students Perceive And Engage With Education.
Let’s see what went wrong in India’s First Edtech Company
WHAT WENT WRONG IN THE COMPANY:
BYJU’S, once a high-flying edtech startup in India, has faced several challenges and controversies in recent years. Here are some of the key factors that contributed to the company’s troubles:
Aggressive Sales Tactics: BYJU'S was known for its aggressive sales tactics, which included pressuring parents to enroll their children in expensive courses and using misleading marketing claims. These practices alienated customers and damaged the company's reputation.
Unrealistic Growth Targets: BYJU'S set ambitious growth targets that led to rapid expansion and unsustainable spending. The company acquired several ed-tech companies without fully integrating them, resulting in inefficiencies and high costs.
Opaque Financial Practices: BYJU'S was criticized for its lack of transparency regarding its financial performance. The company delayed filing its financial statements and faced accusations of overstating its revenue and profits.
Regulatory Scrutiny: BYJU'S faced investigations from Indian regulators over its sales practices and financial reporting. These investigations cast further doubt on the company's credibility and practices.
Changing Market Dynamics: The edtech sector in India has become increasingly competitive, with several new players entering the market. BYJU'S struggled to maintain its dominance as parents became more discerning and demand for online education slowed down.
Disconnect from Students' Needs: BYJU'S focus on high-priced courses and sales targets led to a disconnect from the needs of students. The company's content and approach were not always tailored to the specific needs of different student groups.
Lack of Focus on Long-Term Sustainability: BYJU's aggressive growth strategy prioritized short-term gains over long-term sustainability. The company's high costs and questionable financial practices made it difficult to maintain profitability in the long run.
Inability to Adapt to Changing Trends: BYJU'S struggled to adapt to changing trends in the edtech industry, such as the growing demand for personalized and adaptive learning solutions. The company's focus on standardized courses failed to meet the evolving needs of students.
Erosion of Investor Confidence: The controversies surrounding BYJU's sales practices, financial reporting, and corporate ethics eroded the confidence of investors. This led to a decline in the company's valuation and reduced access to capital.
Failure to Address Concerns Proactively: BYJU's initial response to the controversies was slow and reactive. The company failed to adequately address the concerns raised by customers, regulators, and investors, further damaging its reputation.
YEARLY FINANCIAL BREAKDOWN:
2017:
Revenue: INR 540 crore (US$71 million)
Profit: INR 5 crore (US$6.5 million)
2018:
Revenue: INR 1,300 crore (US$172 million)
Profit: INR 8 crore (US$10.5 million)
2019:
Revenue: INR 2,400 crore (US$317 million)
Profit: INR 16 crore (US$21 million)
2020:
Revenue: INR 4,500 crore (US$594 million)
Profit: INR 24 crore (US$31.5 million)
2021:
Revenue: INR 10,500 crore (US$1.4 billion)
Loss: INR 23.28 billion (US$308 million)
2022:
Revenue: INR 24,306 crore (US$3.2 billion)
Loss: INR 21.64 billion (US$286 million)
It is important to note that BYJU'S has not yet released its audited financial statements for the fiscal year 2023. However, the company has disclosed that it expects to report a loss of INR 16.24 billion (US$215 million) for the year.
CURRENT SITUATION:
Byju’s founder pledged his two houses to borrow $12 million, and the funds were used to pay salaries to around 15,000 employees of byju’s parent firm, think and Learn Private Limited.
CONCLUSION: The story of BYJU’s serves as a cautionary tale in the fast-paced world of tech. The company's rise to prominence and subsequent challenges underscore the importance of ethical business practices, realistic growth targets, and a steadfast commitment to transparency.
What are your thoughts on Byju’s story? Share your views in the comments below.