Less than a week after announcing massive layoffs as part of its restructuring plan, ed-tech major Byju’s on Monday announced new fundraising of $250 million from its existing investors. Byju's is now at that "sweet spot" of its growth story, where its unit economics and the economies of scale, both, are in its favour", according to Byju Raveendran, founder and CEO.
In a statement, Raveendran says the capital, that'll now be invested in its business, will result in "profitable growth". "Regardless of the adverse macroeconomic conditions, 2022-23 is set to be our best year in terms of revenue, growth and profitability. Continued support from our esteemed investors re-affirms the impact created by us so far, and validates our path to profitability,” he said.
Byju’s is expected to lay off around 2,500 employees – around 5% of its 50,000- strong workforce – as it looks to achieve profitability by March 2023, the company said last week.
Amid the start-up funding winter in India, the past couple of months have been tough for most startup companies, including Byju's. The company was targeted recently for not revealing audited financial results in time.
It later reported a loss of ₹4,588.75 crore for the financial year ended March 31, 2021, compared with ₹262 crore in the previous fiscal. On October 12, 2022, the company said, to avoid redundancies and duplication of roles, around 5% of its workforce is expected to be rationalised. Teams across product, content, media, and technology will be affected by this churning.
The decacorn says now it's working towards achieving the group-level profitability by March 2023. For this, Byju's has adopted a "three-pronged" approach. First, it's consolidating all its K10 India subsidiaries into one unit to leverage synergies. Aakash Education and Great Learning, its test-prep and upskilling platforms will continue to operate as stand-alone independent units.
Byju's says it's already the biggest ed-tech platform in India, but now it wants to retarget its marketing budget towards its overseas markets. The company says it's strengthening its inside sales team to ensure efficient and effective consumer-centric lead conversions.
Its parent Think & Learn had reported a loss of ₹4,588.75 crore for the financial year ended March 31, 2021, compared with ₹262 crore in the previous fiscal. Byju’s cited that the rationalised growth between FY21 and FY20 was a result of the changes made in the way the company recognises its revenue.
On the hiring front, Byju's says it will end this financial year as a net hirer. It has plans to hire 10,000 more teachers in the coming year, adding to its current strength of 20,000 teachers.
As Indian startups rely heavily on external funding, they are bearing the brunt. Apart from Byju's, many of the big ones like Unacademy, Vedantu and Cars24 have also laid off employees. As funding winter looms, over 14,000 Indian startup employees have reportedly lost their jobs. The global tally of such employees stands at over 24,000.
The availability of easy capital and the rise in digital adoption had triggered a massive influx of investor funding into Indian startups over the last couple of years with companies often raising funds at what analysts describe as "unrealistic" valuations.