In significant relief to BYJU’S, the family office of Manipal Group chairman Ranjan Pai has acquired the $250 Mn debt availed by the edtech giant’s offline coaching arm Aakash Educational Services Limited (AESL) from Davidson Kempner.

Pai paid out the US-based investor in a bilateral debt transaction, sources close to the edtech giant told Inc42. An entity of Pai purchased all the non-convertible debentures (NCDs) of Davidson Kempner on the NSE Cbrics platform today, the sources added. 

Inc42 couldn’t independently verify the transaction. A BYJU’S spokesperson declined to comment on the matter.

In May, BYJU’S signed a $250 Mn (around INR 2,000 Cr) structured credit deal with Davidson Kempner against Aakash’s cash flow. However, the edtech company has only received INR 800 Cr from the loan. BYJU’S has reportedly used over INR 600 Cr from the facility.

Over the next few months, a breach of the loan term covenant triggered the US-based investor to start talks to return the money. At the same time, Davidson Kempner allegedly restructured Aakash’s board of directors. Though neither party commented on the development, media reports were strife with speculation around Aakash’s future.

BYJU’S and Davidson Kempner started negotiations for a settlement in August this year.

As per the sources quoted above, Pai is also in talks to acquire more stake in Aakash, as has been widely reported in the media over the past few months. Pai and BYJU’S go back nearly a decade, as Pai’s Aarin Capital was one of the first institutional investors in the edtech decacorn. 

According to an ET report, the Manipal Group chairman paid $168 Mn (about INR 1,400 Cr) to acquire the NCDs from Davidson Kempner. This will settle the credit used and the interest incurred on the same.

An overview of AESL’s shareholder distribution portrays BYJU’S parent, Think & Learn Private Limited, as the dominant stakeholder at 40%, followed by BYJU’S CEO Byju Raveendran with a 30% share. The Chaudhry family, the founders of AESL, hold an 18% stake, and Blackstone possesses the remaining 12%.

Ranjan Pai is likely to close ongoing investment talks for AESL once the share-swap agreement between AESL, BYJU’S and Blackstone is settled, which will eventually give him a 25-30% stake in the company. His investment will be in AESL and not Think and Learn.

The development comes at a time when BYJU’S has been looking to stabilise its ship by settling disputes with lenders and selling off US-based assets to focus on the Indian business. The edtech giant is looking to sell two of its US-based subsidiaries, Great Learning and Epic, to raise up to $1 Bn in cash, which it would deploy to repay its debts, including the $1.2 Bn term loan B.

After multiple delays, BYJU’S last week reported select numbers from its standalone financial statement for FY22. The company said its standalone EBITDA loss stood at INR 2,253 Cr in FY22 as against an EBITDA loss of INR 2,406 Cr in FY21. However, it didn’t disclose the net loss and the consolidated numbers.

The post BYJU’S Settles Dispute With Davidson Kempner As Ranjan Pai Acquires Debt appeared first on Inc42 Media.

Troubled edtech giant BYJU’S laid off nearly 600 employees from the content and marketing teams in October as part of its ongoing restructuring exercise, sources told Inc42. 

The move impacted the content and video team more than the marketing team as the former division was shut entirely, the sources said, adding that teachers and educators who were part of the content production team were also impacted by the move. 

The layoffs were part of the retrenchment exercise being carried out under the leadership of BYJU’S new India CEO Arjun Mohan. The development follows a report about BYJU’S marketing head Atit Mehta, content head Asheesh Sharma, and heads of other verticals exiting the company. 

A detailed questionnaire on the latest developments sent by Inc42 to BYJU’S remained unanswered till the time of publishing this story.

Last month, Inc42 reported that BYJU’S planned to lay off nearly 3,500-4,000 employees. The layoff numbers were only for Think & Learn Private Ltd, the parent company of BYJU’S, and didn’t include its subsidiaries, sources told Inc42 then.

In a statement, a BYJU’S spokesperson had then said, “We are in the final stages of a business restructuring exercise to simplify operating structures, reduce the cost base and better cash flow management. BYJU’S new India CEO, Arjun Mohan, will be completing this process in the next few weeks and will steer a revamped and sustainable operation ahead.”

BYJU’S Many Troubles

The edtech decacorn is currently fighting on multiple fronts and has been in the news for all the wrong reasons.

 It was also involved in a legal battle in the US with the lenders of its $1.2 Bn Term Loan B and is currently in talks to restructure the terms of the loan.

Amid the cash crunch, the company is planning to sell Great Learning and Epic for about $800 Mn-$1 Bn. 

According to a Bloomberg report, BYJU’s is in talks with the US-based private equity fund Joffre Capital to sell Epic for $400 Mn.

Meanwhile, sources told Inc42 that cofounder Byju Raveendran is in talks with the US and India-based edtech firms to sell Great Learning for about $400 Mn.

All this comes at a time when there is still no clarity on BYJU’S financial performance in FY22. After multiple delays and missed deadlines, BYJU’S last week released select numbers for its standalone business for FY22.

In a statement, it said Think and Learn Private Ltd reported an EBITDA loss of INR 2,253 Cr in FY22 as against an EBITDA loss of INR 2,406 Cr in FY21. Total income stood at INR 3,569 Cr as against INR 1,552 Cr in FY21. 

But neither did the statement mention the net loss figure for the standalone business nor did it provide any details about the consolidated financials for the year. The edtech firm’s consolidated net loss surged 1,880% to INR 4,588 Cr in FY21.

However, as per the sources, BYJU’S is in the process of filing its consolidated financials for FY22 with the Ministry of Corporate Affairs in the next two weeks.

Mohan’s Attempts To Put The House In Order 

Last month, Inc42 reported that Mohan, who took over as the India CEO of BYJU’S in September this year, is looking to turn around the company’s fortunes by bringing down costs.

As part of this exercise, he ordered an immediate hiring freeze and was said to have zeroed in on senior employees and vertical heads for layoffs. The company also fired employees from sales, HR, finance and tech teams in this exercise. 

“There is a rumour going on in the Bengaluru head office that the company will now be brought down to 2015 levels when it comes to the number of employees, with more focus on junior-level positions,” a source told Inc42 earlier.

However, the company would continue to hire business development associates (BDAs) as it looks to shore up its revenue. 

Meanwhile, Mohan was also said to have ordered a pause on further expansion of BYJU’S offline tuition centres, which were started last year, amid high operational costs and a large number of refund and cancellation requests from students.

While the impact of these changes would only be visible in BYJU’S financial statements for FY24, all eyes are on the edtech’s consolidated FY22 numbers for now. 

The post EXCLUSIVE: BYJU’S Sacks 600 Employees From Content, Marketing Teams In Ongoing Restructuring Exercise appeared first on Inc42 Media.

A 16-year-old student was allegedly stabbed to death by a fellow student (minor) inside a CCTV-monitored classroom of Aakash Institute in Panipat, Haryana, on Friday (November 3).

The accused student, who had an altercation with the victim before the tragic incident, has been apprehended by the Panipat Police and sent to an observation home after being produced in a juvenile court, ThePrint reported. He has been booked under Section 302 of the Indian Penal Code.

Meanwhile, the victim’s family has alleged that the institute allegedly misinformed them about the incident and delayed providing medical attention to the deceased. The family has submitted a written complaint to the police, seeking the constitution of a special investigation team (SIT) to probe the case.

Inc42 has reached out to Aakash and BYJU’S on the matter and the story will be updated as and when the company responds. 

Meanwhile, in a statement, the offline coaching centre chain told ThePrint that it was ‘swift’ in its response and ensured that ‘the student was given immediate medical attention by facilitating their transfer to the nearest healthcare centre’. The company also told the publication that it was cooperating with law enforcement agencies and would continue to do so.

“The police have recovered the murder weapon (a knife) and an investigation is underway. “We have received a letter from the father of the victim in which he has alleged complicity of the coaching institute and we have attached the complaint in the case,” Panipat City DSP Satish Kumar Gautam said.

“We have found through CCTV footage that the stabbing occurred at 5.40 PM in five minutes and we have asked for the entire footage to understand what transpired in the aftermath of the stabbing,” the cop added.

The family has also levelled other accusations against the institute. The victim’s father was cited by ThePrint as saying that the institute was ‘irresponsible in its acts’ after his son was stabbed, and had the administration responded promptly, he would have been alive.

He added that he was ‘misled’ by the institute as their staff told him that the stabbing occurred outside the institute and it was only after his elder brother reached the hospital that he got to know that the fight had taken place inside the classroom. 

According to the CCTV footage reviewed by the police and seen by ThePrint, the victim and the accused were inside a classroom of the institute when the incident happened.

The father of the victim also alleged that the staff at the education centre tried to doctor the evidence, though this cannot be confirmed. However, a police officer said that as soon as his team was informed about the incident, it rushed to the site and the crime scene was preserved.

The stabbing allegedly occurred at around 5.40 PM on Friday at a Panipat centre of Aakash Institute. Another officer, cited by ThePrint, claimed that the accused had ‘confessed’ to bearing grudges against the victim over an earlier incident.

The post Student Stabbed To Death Inside A Classroom At An Aakash Centre In Haryana appeared first on Inc42 Media.

Troubled edtech giant BYJU’S is reportedly in advanced negotiations to sell its US-based children’s digital reading platform Epic for an estimated $400 Mn to private equity fund Joffre Capital.

BYJU’S is considering this sale as a means to alleviate financial challenges, Bloomberg reported.

The potential sale of Epic could provide the edtech company with the necessary funds to address its contested $1.2 Bn term loan, according to the report. Additionally, other interested parties, such as Duolingo, which specialises in creation and development of mobile learning platforms, have also shown interest in acquiring Epic.

BYJU’S acquired Epic in a $500 Mn deal in May 2022.

Moelis & Co. is overseeing the sale process for Epic, and a potential agreement could be reached by the end of this month. However, no final decision has been reached regarding the deal, and BYJU’S may choose to retain the assets for an extended period, the report said.

It was reported earlier that BYJU’S has put two of its subsidiaries, Epic and Great Learning, on sale and is looking to raise between $800 Mn and $1 Bn from it. BYJU’S was expecting to raise $400-$500 Mn from the sale of Epic.

Inc42 has reached out to BYJU’S and will update the copy on receiving a response.

BYJU’S is reportedly also exploring the sale of Aakash Educational Services Limited to tide over the financial challenges. The edtech company has engaged in discussions with private equity firms, including Bain Capital and KKR, regarding the potential sale of Aakash.

Furthermore, private equity firms like Carlyle have also shown interest in supporting Aakash Chaudhry, the former CEO of Aakash, and his family in their efforts to repurchase the company from Think & Learn Private Limited (parent of BYJU’S).

BYJU’S is involved in a confrontation with its lenders over the repayment of its $1.2 Bn Term Loan. The edtech major has been fighting a legal battle with its lenders over the repayment of its term loan.

Meanwhile, after multiple delays in releasing its financial statements for the financial year 2021-22, BYJU’S recently released some numbers for its core operations.

BYJU’S said excluding all acquisitions, Think and Learn Private Ltd (TLPL) – the parent entity of BYJU’S – reported an EBITDA loss of INR 2,253 Cr in FY22 as against an EBITDA loss of INR 2,406 Cr in FY21.

Cofounder and chief executive officer (CEO) Byju Raveendran said BYJU’S will ‘soon’ commence the audit process for FY23. In an internal mail sent to employees and seen by Inc42, Raveendran said the company expects the audit process for FY23 to complete in the coming months.

The post BYJU’S In Advanced Discussions To Sell Epic For $400 Mn To PE Firm Joffre appeared first on Inc42 Media.

At a time when BYJU’S is yet to release the complete financial statements for the financial year 2021-22 (FY22), the embattled edtech giant’s cofounder and chief executive officer (CEO) Byju Raveendran has said it will ‘soon’ commence the audit process for FY23. 

In an internal mail sent to employees and seen by Inc42, Raveendran said the company expects the audit process for FY23 to complete in the coming months. 

“We will soon begin the audit process for the latest financial year (FY23) and complete it in the coming months. I am confident that these results will further reinforce our position as a leader in the edtech industry,” the mail said. 

The development was first reported by Moneycontrol.

This comes hours after the edtech giant released a part of its FY22 numbers. Without disclosing net loss, BYJU’S said the standalone EBITDA loss declined to INR 2,253 Cr in FY22 from INR 2,406 Cr in FY21. On the other hand, total income jumped to INR 3,569 Cr from INR 1,552 Cr in FY21. 

However, the company didn’t mention its consolidated numbers. In FY21, BYJU’S consolidated net loss surged 1,880% year-on-year to INR 4,588 Cr.

Raveendran told employees that the company has closed the audit for FY22 and the report, overseen by statutory auditor BDO, is ‘clean and qualified’. 

Claiming that BYJU’S is becoming ‘more sustainable’ while scaling up, he added that the edtech giant is overcoming many recent challenges step by step.

“We have faced many challenges recently, but together, we are overcoming them step by step. My confidence comes from our shared determination, resilience, and commitment to our mission. Let us continue to push boundaries of what is possible and deliver transformative education experiences to empower and inspire our learners. Together, there’s no obstacle we can’t conquer,” added Raveendran.

It must be noted that BYJU’S has seen a prolonged delay in filing its financial statements for FY22. This also led to BYJU’S then statutory auditor, Deloitte, putting in its papers, followed by the resignation of half of the edtech giant’s board members. 

Russell Dreisenstock of Prosus, Chan Zuckerberg Initiative’s Vivian Wu, and Peak XV Partners’ GV Ravishankar tendered their resignations in June this year, leaving only Raveendran, his wife Divya Gokulnath and brother Riju Raveendran as the remaining members on the board. 

The company has also been plagued by layoffs, skirmishes with regulatory authorities, and a looming debt crisis. The edtech major has been fighting a legal battle with its lenders over the repayment of its $1.2 Bn Term Loan B (TLB). 

Besides, its India chief financial officer (CFO) Ajay Goel also quit last month within six months of taking over the position. He was succeeded by BYJU’S’ president of finance Nitin Golani, who was elevated to the role. 

Amid all this, the company has been looking to streamline operations by rationalising costs and shelving expansion plans. BYJU’S was recently said to be in talks to sell US-based Epic and Great Learning to repay the TLB and chart a path to sustainable growth.

The post BYJU’S CEO Says FY23 Audit To Be Completed In Coming Months appeared first on Inc42 Media.

After multiple delays in releasing its financial statements for the financial year 2021-22, embattled edtech giant BYJU’S has released some numbers for its core operations.

BYJU’S, in a statement, said excluding all acquisitions, Think and Learn Private Ltd (TLPL) – the parent entity of BYJU’S – reported an EBITDA loss of INR 2,253 Cr in FY22 as against an EBITDA loss of INR 2,406 Cr in FY21.

Total income stood at INR 3,569 Cr as against INR 1,552 Cr in FY21. 

However, the company didn’t mention the net loss figure for FY22. BYJU’S consolidated net loss surged 1,880% to INR 4,588 Cr in FY21.

“The takeaways from a uniquely belligerent year, which included nine acquisitions, are life-long learnings. The core business has demonstrated good growth, underlining the potential of edtech in India, the fastest-growing major economy. I am also humbled by the lessons learnt in the post-pandemic world of readjustments. BYJU’S will continue on the path of sustainable and profitable growth in the coming years,” BYJU’S Group CEO Byju Raveendran said in the statement, which raised more questions than it answered.

BYJU’S has been late by more than a year in filing its FY22 numbers. The edtech company had cited the high cash burn of WhiteHat Jr, one of the companies acquired by it, as one of the reasons for the astronomical rise in its consolidated net loss in FY21. As such, the company’s decision to not even mention the numbers for its consolidated business in the statement is bound to raise eyebrows. 

The prolonged delay in releasing the FY22 financial statement has already hit BYJU’S, with its auditor and half of the board members resigning. Earlier this year, BYJU’S statutory auditor Deloitte resigned citing the delay in releasing the financial statements. 

Three out of the six board members of BYJU’S – Russell Dreisenstock of Prosus, Chan Zuckerberg Initiative’s Vivian Wu, and Peak XV Partners’ GV Ravishankar – also tendered their resignations, leaving Raveendran, his wife Divya Gokulnath and brother Riju Raveendran as the only members on the board. 

Last month, BYJU’S India CFO Ajay Goel also stepped down within six months of joining the company. Following this, Nitin Golani, president of finance at BYJU’S, was elevated to the India CFO role. 

In between all these, BYJU’S was also involved in a confrontation with its lenders over the repayment of its $1.2 Bn Term Loan B. The company is reportedly also looking to sell Epic and Great Learning, the companies it acquired during the pandemic-driven edtech boom, to repay the loan.

The post BYJU’S Continues To Bleed, Posts INR 2,253 Cr EBITDA Loss In FY22 appeared first on Inc42 Media.

Edtech unicorn Unacademy has roped in Sandhydeep Purri as its new chief people officer (CPO). In the new role, Purri will be cultivating talent and driving a culture of innovation and progress at Unacademy. 

Purri has been an HR professional for more than 25 years. Her experience spans manufacturing, media & entertainment, consulting, IT, and retail. 

Before joining Unacademy, she was associated with Sapphire Foods as the CPO, overseeing HR strategies for brands like Pizza Hut and KFC. 

Purri has also worked with Aditya Birla Group, where she was responsible for organisational development and effectiveness initiatives across Aditya Birla Retail (now More Retail), Pantaloons Fashion Retail and Madura Fashion and Garments, including stores and non-store facilities.

“Her extensive experience and expertise promise to amplify our mission and will be invaluable as we continue to expand our team and scale up as an organisation,” said Unacademy’s cofounder and CEO Gaurav Munjal.

Chiming in, Purri said, “I look forward to collaborating with the talented team at Unacademy and driving transformative business initiatives that will contribute to the company’s continued growth and success through the people charter.”

The announcement comes a day after the organisation’s chief financial officer (CFO) Subramanian Ramachandran was reported to be planning an exit. According to media reports, Ramachandran has put down his papers and is currently serving his notice period.

In August, Vivek Sinha resigned from his post of COO after serving the edtech unicorn for three years. 

Lately, the Indian edtech industry has seen a lot of rejig at the top level. A few days ago, Eupheus Learning’s founder Sarvesh Shrivastava stepped down from his position as the managing director. He will, however, continue to be associated with the company as a non-executive director on the board, providing guidance and support. 

In September, Aakash was reported to have constituted an executive council to appoint a new CEO. Last month, the coaching centre was reported to be planning to bring back Aakash Chaudhry as the CEO.

Last month, BYJU’S also announced the appointment of its new CEO, Arjun Mohan. 

Since the onset of the funding winter, the edtech industry has suffered huge losses leading to layoffs. According to Inc42’s Indian Startup Layoff Tracker, the edtech sector, which boasts five unicorns, has laid off 9,871 employees since 2022.

The post Unacademy Onboards New Chief People Officer To Drive Innovation & Growth appeared first on Inc42 Media.

Edtech startup Unacademy’s CFO Subramanian Ramachandran is reportedly exiting the startup.

A source aware of the development told The Morning Context that Ramachandran has put down his papers and is currently serving his notice period.

Unacademy declined to comment on the development.

Ramachandran, who has been with Unacademy since 2019, was reportedly the CFO of Medi Assist Healthcare Services earlier.

Ramachandran’s exit comes months after the edtech unicorn’s chief operating officer (COO), Vivek Sinha, resigned in August. 

Meanwhile, Unacademy recently appointed Anurag Tiwari as the National Academic Director for its physical classes division. Tiwari earlier served in a similar position at BYJU’S-owned Aakash Educational Institute.

The development comes at a time when the edtech ecosystem has been in turmoil for more than a year as the high-growth experienced during the pandemic died down following daily life returning to normalcy. To add to the woes, the ongoing funding winter seems to have hit the edtech sector the hardest.

Earlier this month, BYJU’S India CFO Ajay Goel resigned from his role in the company within six months of joining.

Meanwhile, with profitability becoming the focus across the Indian startup ecosystem, Unacademy has also taken a number of steps to improve its bottom line.

Inc42 exclusively reported last week that Unacademy’s software-as-a-service platform Graphy recently laid off 20-30% of its workforce, or nearly 50 employees. However, the company said that the job cuts happened on the basis of performance and had nothing to do with layoffs or revenue growth plan.

Overall, Unacademy has let go of over 2,000 employees since last year, as per Inc42’s layoff tracker.

The edtech major reported a net loss of INR 2,848 Cr in FY22, up 85% year-on-year (YoY). In July this year, Unacademy cofounder and CEO Gaurav Munjal said in a social media post that June 2023 was Unacademy Group’s first-ever cash flow positive month.

The post After COO, Unacademy CFO Subramanian Ramachandran Quits appeared first on Inc42 Media.

Despite embattled edtech giant BYJU’S missing multiple deadlines for filing its financial statements for the financial year 2021-22 (FY22), there is no clarity on when the company will release its numbers for the year.

The company, which is late by over a year in publishing its FY22 statements, has now missed the latest reported deadline of the third week of October for releasing its financial numbers.

A mail sent to BYJU’S by Inc42 seeking clarity on the date by which it would release the FY22 numbers elicited no response till the time of publishing this story.

A Saga Of Missed Deadlines

Earlier this year, the Bengaluru-based startup informed its shareholders and lenders that it will file its FY22 financial statements by September 2023. However, BYJU’S missed this deadline and said that its board would adopt the financial statements for FY22 in the second week of October.

“Think and Learn Pvt Ltd (the parent company of BYJU’S) today has issued a notice for convening a board meeting in the second week of Oct’ 2023 for approval and adoption of accounts for FY22. The board of directors along with the Advisory Council and certain invitees will meet to formally adopt the audited accounts,” a BYJU’S spokesperson told Inc42 last month.

But BYJU’S missed this deadline as well for releasing its FY22 numbers. Following this, it was reported on October 16 that the company was set to release its financial statements during that week. While the company didn’t file its numbers during that week, on October 24, it said BYJU’S India CFO Ajay Goel was quitting the company.

BYJU’S said that Goel would be returning to his former employer Vedanta after completing the formalities of the FY22 audit. However, there seems to be no clarity on when the company would file the FY22 numbers despite the month of October nearing its end.

In FY21, BYJU’S net loss surged 19.8X to INR 4,588 Cr, while revenue from operations grew slightly to INR 2,280 Cr.

Debt Crisis, Layoffs & Exits 

The prolonged delay in filing its FY22 numbers has been a big concern for BYJU’S, which is fighting on multiple fronts. Earlier this year, its statutory auditor Deloitte resigned citing the delay in submission of FY22 financial statements. 

“The financial statements of the company for the year March 31, 2022 are long delayed…we have not received any communications on the resolution of the audit report modifications in the respect of the year ended March 31, 2022, status of the audit readiness  of the financial statements and the underlying books and records for the year ended March 31, 2022 and we have not been able to commence the audit as on date,” Deloitte said in its resignation letter

Following this, BYJU’S hired BDO (MSKA & Associates) as its statutory auditor.

Amid this, the Byju Raveendran-led startup also saw three out of its six board members resign. Russell Dreisenstock of Prosus, Chan Zuckerberg Initiative’s Vivian Wu, and Peak XV Partners’ GV Ravishankar tendered their resignations from the company’s board, leaving Raveendran, Divya Gokulnath and Riju Raveendran as the remaining members on the board. 

Later, Prosus said BYJU’S reporting and governance structures failed to evolve for a company of that scale

“Despite repeated efforts from our Director, executive leadership at BYJU’S regularly disregarded advice and recommendations relating to strategic, operational, legal, and corporate governance matters,” Prosus said in a statement.

Meanwhile, Peak XV Partners, in a letter to its limited partners (LPs), said it would mark down its investments in BYJU’S. The VC firm cited lack of visibility into the company’s audited financials for FY22 and FY23 as a factor for taking “corrective measures” in its investments in BYJU’S.

In between all this, BYJU’S was also involved in a confrontation with its lenders over the repayment of its $1.2 Bn Term Loan B.

The post Multiple Deadlines Missed, Yet No Sight Of BYJU’S FY22 Financials appeared first on Inc42 Media.

Eupheus Learning’s founder, Sarvesh Shrivastava, has stepped down from his position as the managing director. In this transition, the co-founders and board members, Amit Kapoor and Ved Prakash Khatri, who were earlier the directors at the company will assume new roles as the Chief Executive Officer (CEO) and Chief Operating Officer (COO), respectively.

Following this change, Shrivastava will remain associated with the company as a non-executive director on the board, providing guidance and support.

Founded by Shrivastava, Kapoor and Khatri, Eupheus Learning, a Delhi-based B2B edtech startup, was launched in 2017. It operates as a school-focused distribution platform, providing in-classroom edtech products, including curriculum offerings like textbooks, worksheets, teaching guides, and test papers for K12 students.

The company has secured $18.4 Mn in funding to date, with a $10 Mn investment in 2021, led by Lightrock Capital, and acquired another edtech startup ClassKlap in a $19 Mn all-stock deal the same year. Eupheus Learning is also expanding its presence in the Middle East and South-East Asia, encompassing countries such as Bangladesh, Sri Lanka, and others, as stated by the founders when raising the Series C round.

Eupheus Learning aims to bridge the gap between in-class and at-home learning by offering pedagogically differentiated, technology-led solutions with the goal of reaching 10 Mn students by 2024.

The platform offers curated educational offerings in kinesthetic learning, reading enhancement, STEM/STEAM, and English language learning through exclusive partnerships with education technology companies from around the world. Unique school outreach initiatives, such as storytelling sessions for kids, olympiads, and coding competitions, have set the company apart.

Notably, in 2020, Eupheus Learning launched a gamified coding solution called “Learn2Code” in partnership with the Canadian coding company, RoboGarden. Within five months of its launch, Eupheus had onboarded 700 schools and 1.8 lakh students. The startup boasts more than 9,000 user schools and a team of over 500 individuals as of today.

In the K12 segment, Eupheus Learning competes with prominent edtech companies like BYJU’S, Unacademy, Toppr, and Vedantu. According to Inc42’s latest edtech report for 2023, the Indian edtech market is projected to reach $29 Bn by 2030, with hybrid learning expected to be the most effective channel of edtech consumption, particularly in the K12 sector, which is poised to have the highest market share.

The post Edtech Startup Eupheus Learning’s Cofounder Steps Down appeared first on Inc42 Media.

Unacademy-owned software-as-a-service platform Graphy has let go of 20-30% of its workforce, or nearly 50 employees, in the past few weeks, multiple sources privy to the development told Inc42. 

Graphy, which offers learning management system services to creators in the edtech space, has been struggling to hit the revenue target, leading to a restructuring within the firm, Inc42 learned from sources. 

However, it wasn’t immediately clear whether the restructuring was undertaken across Graphy’s acquired companies — Spayee and Scenes. 

In a statement sent to Inc42 after publishing the story, an Unacademy representative stated that the job cuts happened on the basis of performance and have nothing to do with layoffs or revenue growth plan.

“We have not done any layoffs, and we remain focussed on enhancing our team’s performance and overall productivity so we can continue to compound our growth”, a Graphy spokesperson said.

“We continue to make significant strides in achieving our goals, and our commitment to our mission is unwavering,” the statement added. 

Meanwhile, the development comes months after the Unacademy CEO took to social media to praise Graphy, saying that the creators were making approximately $3 Mn a month (INR 24 crore) by selling courses on Graphy.

“Graphy is now doing almost INR 25 Cr in monthly GMV (Gross Merchandise Value). That’s 50% of Classplus, which is the market leader with a valuation of $500 Mn. Classplus is definitely overvalued,” Munjal told employees on the company’s internal Slack channel.

In January this year, Graphy CEO Sumit Jain tweeted that the company turned operationally profitable. The firm’s FY22 revenue stood at INR 8.86 Cr against a loss of INR 3.6 Cr. 

In the same month, Unacademy’s upskilling-focussed group company Relevel laid off 40 employees after pivoting to a B2B platform, Uplevel, which was projected as a homegrown competitor to the professional networking site, Linkedln.

At the time, Munjal said that 80% of the Relevel workforce will be absorbed by Unacademy.

Notably, the SoftBank-backed edtech giant has announced multiple retrenchment rounds since last year, impacting more than 2,000 employees across all verticals.

In March 2022, the company fired 125 ‘consultants’ at its PrepLadder vertical and followed it up by laying off another 210 educators as part of its cost restructuring drive.

Graphy Fails To Take Off

The edtech unicorn envisioned Graphy to be a one-stop shop for creators in the edtech business. 

As per sources, Unacademy draws 10% commission from the creators who use its Graphy tool. 

However, just like a few other acquisitions of Unacademy, Graphy, too, started catching flak from educators and content creators for high commission rates, lack of customer support, and data ownership concerns, among other things.

The learning management system-based platforms, in general, have faced challenges due to a slump in demand for edtech tools and a decline in the number of students, the founder of an edtech firm, who did not wish to be named, said.

Notably, Graphy’s closest rival Classplus’ FY23 net loss jumped 57% YoY to INR 256.6 Cr. 

Moving on, the Unacademy boss had earlier expressed bullishness on Graphy in several internal communications in April this year.

He said Graphy recorded annualised gross merchandise volume (GMV) of $28 Mn in FY23. The SaaS platform’s net revenue retention stood at 113%.

It onboarded nearly 7,500 new creators in the last fiscal year, clocking a 2.6X growth over the past year. With 27,000+ total active courses, Graphy saw 6.61 Lakh new transacting users in FY23. 

“Graphy is turning out to be a phenomenal tech business with amazing unit economics,” the CEO said.

The edtech unicorn is keenly concentrating on refining its core business strategies as it prepares to secure additional funding. The company last raised $440 Mn in a Series H round in 2021.

PrepLadder’s Sorry State

Besides Graphy, one of Unacademy’s major bets, PrepLadder, which it acquired for $50 Mn in 2020, is facing lawsuits from former educators fired last year. 

Not just this, several media reports indicate that the test platform has been witnessing a month-on-month decline in revenues since last year. 

PrepLadder’s FY22 financials also paint a grim picture, as the company reported revenues of INR 155 Cr by incurring a net loss of INR 144 Cr. 

Sources said that Unacademy’s Prepladder has seen intense competition from Allen and Physics Wallah this year, piling up challenges for the edtech firm.

Do Unacademy’s Offline Centres Hold The Key To Recovery?

Fortunately, Unacademy’s offline business has continued to flourish, thanks to the company’s early-mover advantage in the offline space and a handsomely paid workforce.

Earlier this year, the Unacademy CEO said that the company was eyeing scaling its offline coaching vertical considerably from 10 centres at the end of December 2022 to 58 offline centres at the end of the current year. 

The startup was also looking at the number of learners at its tuition centres surging 5.5X to 55,000 at the end of 2023 from 10,000 in 2022. 

In an interesting poaching battle, Inc42 had earlier reported that the Munjal-led Unacademy lured the top teachers from Allen Career Institute (in the UPSC/ IIT-JEE/ NEET preparation segments) with paycheques as fat as INR 1 Cr-1.5 Cr a month.

Since then, Unacademy has been scaling its offline business. As per internal projections, the company’s offline centres are expected to generate INR 400 Cr in revenues in 2023, a major jump from INR 53 Cr in 2022. Meanwhile, analysts believe that the company’s projections for its offline business, which contributes more than 50% to Unacademy’s total revenues, are not overestimated.

In FY22, Unacademy saw its consolidated losses widen to INR 2,848 Cr, up 85% YoY. However, consolidated revenue from operations surged more than 80% YoY to INR 719 Cr in FY22.

Employee benefit expenses accounted for 43% (INR 1,618.9 Cr) of the company’s total expenses during the period under in the period under review. 

Meanwhile, Inc42’s queries regarding the filing of Unacademy’s FY23 financial results remained unanswered.

With Uncademy handing out pink slips in bulk since FY22, it remains to be seen if the company’s back-to-back retrenchment strategy to cull losses will help it embrace profitability or just backfire.

Update | October 26, 17:25 IST

The story has been updated to include a statement from Graphy’s spokesperson and the Unacademy group.

The post Exclusive: Unacademy’s Graphy Cuts 20-30% Jobs To Focus On Offline Ops appeared first on Inc42 Media.

Ahead of the release of its much delayed FY22 financials, BYJU’S India CFO – Ajay Goel, will be stepping down from the edtech decacorn, just six months after his appointment. Goel will be returning to Vedanta Private Limited after completing the formalities of the FY22 audit.

Nitin Golani, currently the president – finance at BYJU’S, will be elevated to the India CFO role. Golani had joined BYJU’S in May 2020 – a time when edtech startups were reaping the benefits of COVID-induced lockdown.

Goel, who looked after the merger and acquisition, had played a pivotal role in BYJU’S $1 Bn acquisition of Aakash Education. Post the acquisition, Goel took over as chief strategy officer at Aakash Education.

Besides this, BYJU’S appointed Pradip Kanakia as the senior advisor. Kanakia has earlier held leadership positions at Price Warehouse and KPMG and has led audits for several Indian and multinational companies.

Kanakia will be working closely with BYJU’S advisory council and the founders. 

In July, BYJU’S appointed  SBI Chairperson Rajnish Kumar and ace investor TV Mohandas Pai as members of its newly-constituted advisory council.

This came after the edtech decacorn saw three of its board members – Peak XV Partners’ GV Ravishankar, Prosus’ Russell Dreisenstock, and Vivian Wu of Chan Zuckerberg Initiative – tendering their resignations.

Last month, BYJU’S also appointed Arjun Mohan as India CEO, replacing Mrinal Mohit, who has been a founding partner at BYJU’S. 

The latest top-level rejig has come at a time when there’s mounting pressure on BYJU’S to release its FY22 audited financial statements. The startup is running 19 months behind in reporting its financial statements for FY22. It must be noted that BYJU’S released its financial statements for FY21 after a long delay in September last year. Its loss surged 19.8X to INR 4,588 Cr in FY21.

Additionally, the top brass of BYJU’S also have to devise a plan to pay back a $1.2 Bn loan that it had taken from lenders almost two years ago. The new CFO might  also be tasked with selling Great Learning and EPIC for $800 Mn – $1 Bn. 

It must be noted that BYJU’S, which is trying to sell Great Learning to pay off the lenders, have faced resistance from top management of Great Learning as they intend to buy back the edtech startup from BYJU’S parent Think & Learn Private Limited. 

The post BYJU’S India CFO Ajay Goel Steps Down Within Six Months appeared first on Inc42 Media.

Edtech giants Unacademy and BYJU’S are under the regulatory scanner for making false claims regarding the number of  their alumni who cleared the Civil Services Exam conducted by the Union Public Service Commission (UPSC).

As per CNBC-TV18, the Central Consumer Protection Authority (CCPA) has reserved its order against the UPSC preparation vertical of Unacademy for allegedly advertising false numbers about their alumni clearing the exam.

While the quantum of action is yet to be decided against Unacademy IAS, a penalty of INR 1 Lakh each has been slapped on Chahal Academy, IQRA IAS, and Rau’s IAS Study Circle. Besides, edtech decacorn BYJU’S is also being probed for similar marketing tactics. 

Making matters worse appears to be the government’s plan to also crack the whip on NEET and JEE prep platforms. Edtech platforms account for a big chunk of JEE and NEET students and may be bracing for a major regulatory action. 

Meanwhile, notices have been issued to 20 UPSC coaching institutes, including BYJU’S, in connection with this case. While some of the 20 centres have reportedly paid the penalty amount, many others are planning to contest the notices. Curiously, the report claims that many hearings on the matter are already underway. 

At the heart of the matter is the excessive marketing claims made by edtech companies and other UPSC-preparation institutes. While 933 students were selected after the final result of UPSC 2022, ads by 10 surveyed institutes claimed that 3,500 of their alumni made the cut. 

Explaining the modus operandi of the row, consumer affairs special secretary and CCPA commissioner Nidhi Khare told CNBC-TV18 that these platforms would kick into action right after UPSC released the results of preliminary exams. 

She said that these coaching institutes would first offer free mock interview sessions for the shortlisted candidates, and then claim as their alumni later. 

“As nearly 1/3rd of shortlisted candidates go on to clear the mains exam, institutes are able to get at least some candidates selected who had only availed of the free mock interview sessions conducted by the institute. She said that misleading advertisements may prompt aspirants to start thinking that unless they join an institute, they won’t be able to crack IAS, JEE or NEET,”  Khare told the news channel. 

A probe by CCPA is said to have revealed instances of five UPSC coaching institutes claiming one single individual as their alumnus. The consumer protection agency reportedly stated that many centres concealed the aspect of free mock interviews and other vital information from customers in page-long ads, violating the Consumer Protection Act.

Meanwhile, CCPA is looking at issuing a detailed set of guidelines to ensure compliance with rules and curb inflated claims by coaching institutes. 

Under current advertisement rules, the first offence constitutes a penalty of INR 10 Lakh while an INR 50 Lakh fine is to be levied for subsequent violations. 

This is not the first time that edtech companies have run into trouble with government agencies. Last year, the apex child rights body in India, the National Commission for Protection of Child Rights (NCPCR), pulled up BYJU’S for allegedly mis-selling courses and luring parents through malpractices. 

Not just this, ASCI also claimed that the education sector accounted for 27% of objectionable ads surveyed by the industry body (traditional education accounted for 22% and edtech 5%) in 2022. 

The post Unacademy, BYJU’S UPSC-Prep Verticals Under Regulatory Lens For Misleading Ads appeared first on Inc42 Media.

Edtech soonicorn BrightCHAMPS reported a 22.7% decline in its standalone operating revenue to INR 17.4 Cr in the financial year 2022-23 (FY23) from INR 22.5 Cr in the previous fiscal year. 

Founded in July 2020 by Ravi Bhushan, BrightCHAMPS offers certificate courses for coding, creative thinking, financial literacy, among others, to kids in the 6-16 years age group. It earns a majority of its revenue from the sale of services.

Total revenue, including interest income, declined to INR 20.6 Cr from INR 22.5 Cr in FY22.

Hurt by the decline in revenue and rise in expenses, the startup’s net loss widened to INR 159.5 Cr in FY23 from INR 98.6 Cr in the previous year.

It must be noted that after Inc42 reported the company’s FY22 results earlier this year, BrightCHAMPS issued a statement saying given the global nature of its business, the revenue of its international entities exceeded the revenue of the India entity by more than 100%.

However, the contribution of the revenue from India to the startup’s overall global revenue is not clear. 

Expenses Rise Despite Decline In Revenue

Despite the fall in top line, BrightCHAMPS failed to control its expenses during FY23. The startup’s total expenses jumped 1.5X to INR 180.1 Cr from INR 121.1 Cr in FY22.

Employee benefit expense was the single biggest contributor to total expenses, growing 1.3X to INR 73.1 Cr from INR 54.8 Cr in the prior fiscal.

In fact, despite the Indian startup ecosystem being hit by layoffs and restructuring exercises amid the ongoing funding winter, which has hurt the edtech sector the worst, BrightCHAMPS was in the headlines as it continued to hire and give increments to employees.

While the startup spent INR 45.2 Cr on salaries and wages in FY23, it spent INR 25 Cr on ESOPs.

In January this year, it announced stock options worth $1 Mn for 400 of its teachers.

Meanwhile, BrightCHAMPS’ advertising and marketing expenses also jumped 1.3X to INR 58.2 Cr in FY23 from INR 42.4 Cr in the prior year.

On a unit economics level, the startup spent INR 10.35 to earn every INR 1 from operations.

Earlier this year, BrightCHAMPS made its third acquisition in the form of Hyderabad-based edtech startup Metamorphosis Edu.

BrightCHAMPS last raised $63 Mn in 2021 in a round led by Premji Invest, GSV Ventures, 021 Capital, Beenext, and Binny Bansal for further global expansion. 

The startup competes with the likes of BYJU’S-owned WhiteHat Jr and PlanetSpark. 

The post Edtech Soonicorn BrightCHAMPS Spent INR 10 To Earn Every INR 1 From Ops In FY23 appeared first on Inc42 Media.

Byju Raveendran-led edtech giant BYJU’S which is besieged by numerous challenges seems to now be selling its crown jewel – Aakash Educational Services Limited – to get a lifeline. 

The edtech decacorn has held talks with PE firms such as Bain Capital and KKR to discuss the sale of Aakash, an ET report said. 

PE firms such as Carlyle are eager to support Aakash Chaudhry, former CEO of Aakash and his family, to buy back the firm from Think & Learn Private Limited (BYJU’S). 

BYJU’S has however denied selling of Aakash to the national daily. 

In 2021, Chaudhry and his family along with PE firm Blackstone, sold Aakash to BYJU’S for $950 Mn – marking the biggest acquisition by an edtech in India. 

At present, BYJU’S parent, Think & Learn Private Limited, is the dominant stakeholder in Aakash with 40% stake, followed by BYJU’S CEO Byju Raveendran with a 30% share. The Chaudhry family, hold an 18% stake, and Blackstone possesses the residual 12%.

These talks are at a preliminary stage and will only materialise after a long due diligence procedure. The talks also involve Ranjan Pai, who is said to be investing $100 Mn in equity and an additional $170 Mn in structured debt to help BYJU’S clear $96 Mn in dues to hedge fund Davidson Kempner.

Manipal Group’s Pai is also likely to bring in more private equity firms to the cap table to help BYJU’S navigate the current difficulties.

 It is worth noting that Pai has ramped up his involvement in Indian startup ecosystem. Lately, the Manipal Group chairman is currently in discussions to invest in various startups such as FirstCry, Bluestone and Pharmeasy, among others

This development closely follows reports that hint at the potential return of Chaudhry to his role as CEO of Aakash.

BYJU’S Endless Troubles

This is not the first time that BYJU’S has held talks to sell one of its assets to clear its dues and get additional capital to run its operations. As per multiple sources, BYJU’S has been trying to sell Great Learning and Epic for $800 Mn – $1 Bn. 

The sale of Epic and Great Learning was part of the proposal BYJU’S made to its Term Loan B lenders, the sources added. In November of 2021, BYJU’S took a term loan of $1.2 Bn and has been ferreting ways to repay it. 

Out of the $1.2 Bn Term Loan B, BYJU’S has about $500 Mn left and the sale of Epic and Great Learning will allow the edtech giant to clear the loan and give it some room for negotiations with other lenders. 

Besides this, the edtech giant is also cutting around 4,000 workforce in another round of layoffs, to cut costs and increase its cash runaway. The edtech giant which is undergoing a massive restructuring exercise from top to bottom, is yet to file its FY22 financials.

The post Edtech Giant BYJU’S In Talks With PE Firms For Aakash Sale appeared first on Inc42 Media.

To say the least edtech decacorn BYJU’S is not in the best shape, and the founder Byju Raveendran and his workforce need a quick turnaround for a better tomorrow.

For one, hardly anything seems to be on track for the country’s highest-valued edtech decacorn — be it the $1.2 Bn Term Loan B headache, further triggered by lender lawsuits in the US, sinking acquisitions or the company’s never-ending layoff spree. The founder’s efforts to raise funds have also not materialised.

At the helm of affairs, Raveendran is holding talks with the disgruntled lenders, trying to sell two of BYJU’S upskilling platforms, Great Learning and US-based Epic, which could fetch it $800 Mn. However, it only seems to be a distant dream.

According to Inc42 sources, Raveendran is trying to raise nearly $250 Mn for BYJU’S most promising subsidiary, Aakash Educational Services Limited (AESL), in a secondary share sale where he is likely to dilute his 30% stake and use the cash to pay off some part of the debt.

AESL will likely see the return of its promoter Aakash Chaudhry as the CEO in a share swap deal, which will, to some extent, wrest control of the entity with the Chaudhry family.

Meanwhile, the BYJU’S founder has given the reigns of the India business to his earliest colleagues and former upGrad India CEO Arjun Mohan, who has now taken the CEO tag from Raveendran’s other confidante, Mrinal Mohit. For the uninitiated, both Mohit and Mohan were a part of BYJU’S founding team.

So, where does it leave Mohan?

Well, to answer in brief, Mohan has a lot on his plate. Apart from culling the company’s ever-bloating losses and stabilising falling revenues of the company’s core business, the new CEO has miles of roiling waters ahead of him to navigate the BYJU’S creaking ship.

Ever since onboarding the BYJU’S ship last month, Mohan’s intentions indicate just one thing — he does not want any dead weight on the company. This is probably why he is super focussed on integrating verticals and letting go of senior executives. 

At a time when Mohan has barred employees from communicating with the media, Inc42 has learnt about a number of developments unfolding at the edtech giant under the new leadership.

HR, Sales And Finance Depts On New CEO’s Turnaround List 

According to sources, Mohan, who was earlier the chief business officer at BYJU’S and has also worked with the sales and marketing teams, is said to have hit the pause button on hiring across departments like finance, technology, marketing, training, and auditing. 

However, the company will continue to hire business development associates (BDAs) to perk up its revenue stream. 

A few employees at BYJU’S told Inc42 that the company has already sacked several employees in the last 10 to 15 days. The pink slips have been given to mid- and senior-level employees as part of the company’s plan to lay off as many as 4K staffers in yet another retrenchment exercise. Similarly, the integration of various verticals has resulted in the elimination of many redundant roles at the company.

“There is a rumour going on in the Bengaluru head office that the company will now be brought down to 2015 levels when it comes to the number of employees, with more focus on junior-level positions,” a source said.

If this is the case, Mohan could be looking at significantly deflating employee expenses, which ballooned to 1,943 Cr in FY21 from INR 420 Cr in FY20.

Meanwhile, we have been told that the management is keeping a close watch on finance, sales and customer care departments to curb the rise of unethical practices — another key reason for the company’s ailment.

In fact, a source said that the company also attracted the government’s intervention for getting its hands on the bank statements of some of its customers and applying for loans without their consent. Inc42 could not independently verify these claims.

Further, finance operations have been restructured and partnerships with lenders are also being reworked to eliminate any malpractices.

“Ideally, this is what the company was expected to do in the first place,” a BYJU’S mid-senior executive said, requesting anonymity.

On the contrary, as losses kept piling up, BYJU’S was looking at shutting down offices in 60 cities across India last year to curb the infrastructure costs and switch to inside sales instead of field sales.

In July this year, the edtech giant vacated multiple offices in Bengaluru to save rental costs.

As per multiple sources, field sales will now be one of the top priorities of the new CEO, who is also keen on hiring more BDAs.

Fixing The Revenue Rationale

Questions, too, have been raised on BYJU’S for its unsustainable revenue recognition practices and exaggerated sales figures, especially when it came to the sale of its tablets and online courses. 

In FY21, BYJU’S adopted a new revenue recognition model, which proved to be of little help. Following the release of its FY21 results, the company claimed that much of the losses it incurred were due to changes in the way it recognised multi-year revenues.

Raveendran had then said that around 40% of the revenue collected in FY21 got deferred, which would have otherwise resulted in 60%-65% revenue growth.

During the year, the company reported a slight rise in revenue from operations, which stood at INR 2,280 Cr in FY21 versus INR 2,189 Cr a fiscal ago. And the edtech giant was seen drenching in record losses of INR 4,588 Cr in FY21, up a massive 1,880% year-on-year (YoY).

Meanwhile, we have been told that the company has now floated a mandate, across the sales departments for both BYJU’S online and offline businesses, to acknowledge real revenues and not the EMIs that are yet to be realised.

Wait-And-Watch Approach For BYJU’S Tuition Centres

We have been told that Mohan isn’t very confident about the expansion of the company’s tuition centres and could shut down half of them by December this year. The centres that have failed to generate desired revenue targets and have only added infrastructure and marketing costs will be on BYJU’S India CEO’s hit list.

Under the reign of its erstwhile CEO, Mohit, BYJU’S had set an ambitious target to open nearly 500 offline coaching institutes last year. The edtech firm ended up setting up 300 institutes. It had roped in top celebrities, including actor Shah Rukh Khan, to endorse the offline centres when rival Unacademy was aggressively solidifying its offline footprint. 

BYJU’S had announced that its tuition centres will cater to the K-12 education space. However, one year on, these centres, too, seem to be ailing with the dearth of quality teachers, customer service support and infrastructure.

As per a report published by Moneycontrol, 60% of the tuition centres set up by BYJU’S had customers requesting course refunds and cancellations. 

The report highlights that the company’s tuition centres received a total of 43,625 refund requests between November 9, 2021, and July 11, 2023. Of these, the company processed 41,198 requests, accounting for approximately 95% of the total refund requests. To date, the edtech has sold nearly 75,000 tuition centre subscriptions. 

However, BYJU’S refutes the numbers cited by the publisher. 

Meanwhile, sources told Inc42 that several BYJU’S Tuition Centres (BTC) in North India were shut after many parents protested, seeking refunds and inviting police intervention.

A former senior executive of BYJU’S, who was associated with the company’s offline tuition business, told Inc42 that parents were not satisfied with the mode of teaching. “Some teachers were taking online classes even when students were physically present at the centres,” the senior executive said.

The faculty also kept changing as BYJU’S looked to hire contractual teachers on reduced pay scales, leaving both parents and teachers more and more dissatisfied, multiple sources said.

Just a month before BYJU’S new CEO, Mohan, took over the reins of the company, some top executives heading BYJU’S Tuition Centres stepped down. These executives were Prathyusha Agarwal, the chief business officer of BYJU’S; Himanshu Bajaj, the Business Head of BTC, and Mukut Deepak, the business head for Classes IV-X.

According to media reports, BYJU’S did not pay performance-linked incentives to its BTC faculties, which also led to many voluntary exits.

In addition, there are huge infrastructure and employee costs that BYJU’S bears on behalf of BTC. 

“If the tuition centres are not adding any value then Mohan may scale them down as well,” a source said. 

Inc42 reached out to BYJU’S with an extensive questionnaire about the company’s operational overhaul. As of this article’s publication, we have yet to receive a response.

The Fate OF BYJU’S Workforce Hangs In The Balance

BYJU’S has been brutally shedding its headcount since last year. Right now, the layoff axe is hanging over senior employees, as many senior managers, team leaders, software engineers have already been let go. This is in stark contrast with the ex-CEO’s (Mohit) policy of downsizing on-field sales representatives and associate-level employees.

There is no denying that the current CEO wants to increase the cash flows of the company by bringing the employee count down. However, given the fact that Mohan is laser-focussed on boosting the revenues of BYJU’S core business, he will need BDAs to bring in sales.

“But, for now, senior employees are looking at other edtech firms for a possible job switch at the earliest. The regular changes in team structures, PIPs, and revenue targets have only added to the stress here and hence many employees are looking to leave BYJU’S,” a senior manager at the edtech said, requesting anonymity.

Employees no longer see BYJU’S as a sustainable career but rather as a quick transition to better alternatives. This sentiment is further corroborated by former BYJU’S employees’ outbursts on social media regarding an alleged toxic work culture.

Mohan now faces the challenging task of not only rebranding the edtech decacorn but also ensuring that the organisation gets a sustainable revenue boost, especially in India.

The company has finally completed the audit of all group subsidiaries and will likely float the audited FY22 financials this week. And experts foresee a dismal FY22 performance.

This is because even after curtailing employee expenses and infrastructure costs in FY23, including multiple restructuring attempts, hopes of anything promising appear to be bleak.

However, Mohan’s wait-and-watch strategy for asset-heavy tuition centres could be a step in the right direction, especially in a highly fragmented tuition centre market.

 As of now, the new CEO seems to be taking a U-turn on many fronts – from what BYJU’S erstwhile CEO, Mohit, was doing to salvage the company or how the edtech giant has been running to date. 

Will his antithesis prove to be the turnaround BYJU’S has been looking for long? Well, that’s something even we are keen on finding going ahead.

The post Rethinking BYJU’S: Can The New CEO Resurrect The Struggling Giant? appeared first on Inc42 Media.

After a delay of over a year, edtech major BYJU’S is set to file its financial statements for the fiscal year 2021-22 (FY22) later this week. 

The company told Inc42 that the edtech major has finally completed the audit of all group subsidiaries and will likely incorporate the audited financials into its consolidated report this week. 

“The audit of all the group subsidiaries have been completed and adopted. Think and Learn Private Ltd, the parent, is expected to adopt the consolidated results this week to factor in certain positive developments in the company,” said a company spokesperson.

It must be noted that amid a looming debt crisis, cash crunch and a slew of other controversies, BYJU’S has also been facing investors’ ire over the delay in filing its FY22 financials.

The development was first reported by Bloomberg.

The new deadline comes a fortnight after the company missed its previous deadline of September 30 to report its financials. It had informed its shareholders and lenders that it would file its FY22 financial statements by September 2023 but later said that FY22 financials would be adopted by the company’s board in the second week of October.

This is not the first time that the company has delayed filing its financial reports. Earlier, it filed its FY21 numbers after a delay of nearly a year in September last year. Its loss ballooned 20X year-on-year (YoY) to INR 4,588 Cr in FY21. 

Since then, the supposedly most-valued startup in the country has been plagued by a slew of issues. With the entire ecosystem gripped by a funding winter, the company undertook streamlining of its operations, which saw 4,000-5,000 employees being laid off. It has also shelved expansion plans as newly-appointed India CEO Arjun Mohan began carrying out a full-scale restructuring of operations. 

The edtech major has also been pummelled by a debt crisis related to the $1.2 Bn Term Loan B (TLB) that it took in November 2021. The company and its lenders have been locked in a tussle over a missed interest payment on the TLB and the legal battle that has erupted since then over the matter. 

As this saga pans out, the company’s acquisition spree at the top of the capital boom in 2021 has failed to yield any substantial results. The decacorn is said to be scouting buyers to offload two of its acquired companies – Great Learning and Epic – for a sum of $800 Mn-$1 Bn to repay the loan.

Meanwhile, the delayed financials and regulatory scrutiny surrounding the matter led to the resignation of Deloitte Haskins & Sells as the edtech major’s auditor earlier this year. Three of BYJU’S board members – Peak XV Partners’ GV Ravishankar, Prosus’ Russell Dreisenstock, and Vivian Wu of Chan Zuckerberg Initiative – also tendered their resignations this year. 

Even as stakeholders patiently wait for FY22 results, there seems to be no clarity for FY23 results. 

Not just this, BYJU’S has also been under the radar of government agencies ranging from the Ministry of Corporate Affairs over delayed financials to a consumer protection body for allegedly misselling courses. 

The post After A Year-Long Delay, BYJU’S To File FY22 Financials Later This Week appeared first on Inc42 Media.

Aakash Chaudhry, the promoter of Aakash Institute, is likely to return as the CEO of the offline test prep chain as part of the share swap being finalised with its owner BYJU’S.

The share swap deal was a part of the acquisition announced about two years ago. He will be replacing incumbent Abhishek Maheshwari who left Aakash last month, according to an ET report.

Chaudhry served as the CEO till November 2020.

Chaudhry is likely to retain his 9% stake in Aakash, while he’ll get around 1-2% in BYJU’S parent Think & Learn at around $11 Bn – $12 Bn valuation. The transaction is expected to be finalised this month, this person added.

After the transaction, Think and Learn is likely to own at least 51% in Aakash. Private equity firm Blackstone currently has around 12%, while promoters, the Chaudhry family, hold an 18% stake in Aakash.

The development also comes more than a month after Aakash Institute had set up an executive council to appoint a new CEO after Maheshwari’s exit early September.

For a recap, BYJU’S had acquired Aakash in 2021 for $950 Mn in the biggest acquisition deal in the Indian edtech space. The original deal included 70% payment in cash and the rest in equity.

The offline test prep chain has been long touted as being one of BYJU’S most valuable assets, with its strong brand image and cash flow situations. However, while there were media reports suggesting some disagreements between the two parties, those seem to have been ironed out.

The offline test prep chain is looking to go for an IPO in mid-2024, it said in a June statement.

Aakash has not filed its financial statements for FY22 with the Ministry of Corporate Affairs. In FY21, Aakash’s revenue from operations dropped 23.5% to INR 982.7 Cr from INR 1,214 Cr in FY20.

Its profit also dropped 73.6% to INR 43.6 Cr in FY21 from INR 165.7 Cr in FY20.

Aakash’s cash flow also served as collateral for BYJU’S securing a $250 Mn (INR 2,000 Cr) credit line from Davidson Kempner, which ran into trouble as the lender called for accelerated payments citing a breach in one of the loan covenants.

Incidentally, Manipal Group chairman Ranjan Pai may invest as much as $300 Mn in Aakash Institute, to acquire a larger stake in the brick-and-mortar business. 

He is close to investing $170 Mn which will be used to clear the Davidson Kempner debt BYJU’S secured in May this year.

The post Comeback On The Cards? Chaudhry Might Return As Aakash CEO appeared first on Inc42 Media.

Continuing its loss-making streak, Delhi NCR-based edtech startup Classplus has reported yet another year of loss.

The Tiger Global-backed edtech soonicorn’s net loss jumped 57% to INR 256.6 Cr in FY23 from INR 163.5 Cr in the previous fiscal year. 

Meanwhile, operating revenue jumped 4X to INR 102.04 Cr in FY23, compared to INR 25.9 Cr in the previous year. Its total income rose to INR 149.1 Cr as against INR 45.4 Cr in the previous year.

On a unit economic basis, the startup spent nearly INR 4 (INR 3.97) to earn every rupee in operating revenue. However, its EBTIDA margin improved from -353.7% in FY22 to  -156.6% in FY23. 

Founded by Mukul Rustagi and Bhaswat Agarwal in 2018, Classplus is a mobile-first SaaS platform that allows educators and content creators to build online presence, digitise their offline tuition centres and sell their courses online. The startup primarily generates revenue by selling subscriptions to online educators.

Valued at over $600 Mn, the edtech startup has raised close to $130 Mn to date and is backed by investors such as Peak XV Partners, Blume Ventures, Alpha Wave Ventures.

Zooming Into ClassPlus’ Financial Report Card

In a year when edtech startups were hit by the reopening of offline education institutions post the pandemic, the edtech soonicorn’s expenses almost doubled. Total expenditure stood at INR 405.2 Cr during the year under review compared to INR 208.9 Cr in the previous fiscal year.

Let’s take a look at key items on which it spent the most:

• Employee Expenses Double: The startup spent INR 228.9 Cr on employee benefits in FY23, which was almost the double of INR 104.4 Cr in FY22. Employee benefit expenses include employee wages, PF contributions, gratuity, among others. As per LinkedIn, Classplus currently has around 806 employees. 
• Advertising Spends Rise: In a bid to increase mindshare amongst potential customers, the edtech startup hiked its advertising spends by 50% to INR 51 Cr from INR 34 Cr in the previous fiscal year. 
• A Cutdown On IT Spends: Unlike advertising or employee expenses, the IT spend of the company came down by almost 21%. It spent INR 40.3 Cr on IT in FY23 compared to INR 51.2 Cr in the previous fiscal year. 

The startup competes against the likes of Testbook and LEAD. 

It must be noted that last year, Classplus was also in talks to acquire Testbook. Alpha Wave-backed Classplus’ board had approved allotting CCPS worth $8.5 Mn (INR 67.8 Cr) to Testbook’s existing investors – Matrix Partners and Pivot Ventures, according to regulatory filings. At that time it was also reported that more investors of Testbook will sell their stake to Classplus. However, there have been no updates since then. 

During FY23, Classplus also made an investment in test preparation platform, Abhinay Maths.

Earlier this year, Classplus faced legal trouble when Saarthi’s cofounder, Chiraag Kapil, and its investors filed a lawsuit against it in the Delhi High Court (HC) for alleged cheating and criminal breach of trust.

As per the lawsuit, Classplus acquired Saarthi in 2022 but the investors associated with the latter are yet to receive their stipulated agreements or the corresponding equity in Classplus they were entitled to post the execution of the deal.

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Six of BYJU’S biggest investors have reportedly formed an informal working group to engage with the edtech giant, track its progress and provide suggestions. 

The group was formed a few weeks ago and consists of General Atlantic, Prosus, Peak XV, Sofina, Chan Zuckerberg Initiative and Verlinvest, Moneycontrol reported.

A mail sent to BYJU’S seeking details about the working group didn’t elicit any response till the time of publishing this story. Meanwhile, General Atlantic and Prosus declined to offer any comments on the matter. Peak XV, Sofina, Chan Zuckerberg Initiative and Verlinvest did not respond to requests for comments.

The working group is said to be different from the advisory panel BYJU’S recently formed to stabilise the company as it fights on multiple fronts. The advisory panel consists of the likes of former SBI chairman Rajnish Kumar and ace investor TV Mohandas Pai.

As per the company, the council will guide the board and CEO Byju Raveendran in matters related to the company to bolster corporate governance guardrails.

The move to form the working group comes three months after the representatives of Peak XV, Chan Zuckerberg Initiative and Prosus stepped down from BYJU’S board citing differences with the edtech’s cofounder and CEO Raveendran.

In June, GV Ravi Shankar, Vivian Wu and Russel Dreisenstock all resigned from their positions abruptly.

Nearly a month later, Prosus issued a statement stating that BYJU’S executive leadership disregarded Dreisenstock’s advice and recommendations on matters related to strategy, operations, legal affairs and corporate governance. Peak XV also communicated in a letter to its limited partners that the lack of transparency within the edtech’s management prompted Ravishankar’s departure from the company’s board.

BYJU’S statutory auditor Deloitte also quit over similar disagreements and was replaced by BDO.

The latest development comes at a crucial time for the edtech giant, as it looks to secure up to $300 Mn from Manipal Group chairman Ranjan Pai for its offline unit Aakash. He will invest $170 Mn in the first tranche, followed by subsequent investments.

Further, BYJU’S is also actively looking to sell Great Learning and Epic, two of its US-based subsidiaries. It is aiming to raise up to $1 Bn from the sale of the two assets to pay off its $1.2 Bn term loan B. The lenders recently hired risk and financial advisory solutions provider Kroll to ‘safeguard’ the charged assets of Great Learning.

After missing yet another deadline for filing its financial numbers for FY22, the Bengaluru-based edtech giant recently said its board will meet in the second week of October for approval and adoption of its much-delayed financial statements for the year ended March 31, 2022.

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Ranjan Pai, the chairman of Manipal Group, is contemplating a hefty investment in Aakash Educational Services Limited (AESL), BYJU’S’ physical education division, with figures reaching up to $300 Mn.

The new figure is nearly four times as high compared to the $80 Mn which Pai was originally said to be lining up. This would also make it Pai’s biggest bet so far in India’s startup ecosystem, even as the Manipal Group chairman has recently invested in startups such as FirstCry, Bluestone and Pharmeasy, among others.

Incidentally, Pai is also said to be bringing some private equity (PE) firms to the table for the total investment, the ET reported citing sources close to the developments.

According to the report, Pai will invest $170 Mn in the first tranche, with subsequent investments down the line. The cash injection is likely to be used to pay off the debt Aakash took from Davidson Kempner.

Earlier this year, a financial agreement between Aakash and BYJU’S was inked, securing a credit line approximating $250 Mn. Yet, upon receiving a fraction of the agreed amount, roughly $96 Mn, Davidson Kempner purportedly cited a contract violation.

The two parties are currently in discussions of sorting the matter out. According to media reports from last month, BYJU’S will pay the amount it received, plus an interest of around INR 600 Cr ($96 Mn) to close the debt.

Furthermore, Ranjan Pai appears to be eyeing a more significant portion of Aakash. An overview of AESL’s shareholder distribution portrays BYJU’S parent, Think & Learn Private Limited, as the dominant stakeholder at 40%, followed by BYJU’S CEO Byju Raveendran with a 30% share. The Chaudhry family, AESL’s founders, hold an 18% stake, and the PE entity, Blackstone, possesses the residual 12%.

While reports have consistently suggested that there are alleged disagreements between the Chaudhry family and BYJU’S over the share swap deal announced two years ago, sources close to the edtech giant have denied anything of the sort.

BYJU’S, which has been engulfed in controversy over the past 12 months or so, is close to wrapping up a few important matters. The edtech giant is actively looking to sell two of its US-based subsidiaries, Great Learning and Epic, to raise up to $1 Bn in cash which it would deploy to repay its debts, including the $1.2 Bn term loan B.

In a statement on Wednesday, risk and financial advisory solutions provider Kroll said it has been appointed by BYJU’S term loan B lenders to ‘safeguard’ the charged assets of Great Learning.

The Bengaluru-based edtech had also issued a notice to investors and the board, saying it will present the audited financials for FY22 – to the board, advisory council as well as key investors Peak XV Partners and Prosus – by the second week of October.

Concurrently, BYJU’S has initiated further staff reductions, which could potentially affect over 4,000 employees.

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Lenders of BYJU’S have appointed risk advisory firm Kroll to protect the “charged assets” of both Great Learning Pte and the edtech firm’s Singapore entity Byju’s Pte. Ltd.

The main objective of this appointment is to safeguard and maintain the assets and businesses belonging to Great Learning, which includes its subsidiary, Northwest Education Pte. Ltd., and Byju’s Pte. Ltd., Kroll said.

Cosimo Borrelli, the global co-head of restructuring, and Jason Aleksander Kardachi, who leads Kroll’s Singapore office, have been selected to oversee this task.

Kroll is working closely with the management of Great Learning and Northwest Education. Mohan Lakhamraju, founder and CEO of Great Learning, continues to lead the Great Learning business and its management team.

“I am happy to see the Kroll team’s commitment towards Great Learning’s high quality education and continued growth and look forward to collaborating with them towards the realisation of our mission of enabling career success through transformative learning,” Lakhamraju said in a statement.

Founded by Arjun Nair, Hari Nair, and Mohan Lakhamraju in 2013, Great Learning offers comprehensive, industry-relevant programs across various technology, data and business domains.

This move comes at a time when BYJU’S is considering the possibility of selling Great Learning.

Earlier, it was reported that the founders of Great Learning, the edtech startup acquired by BYJU’S in 2021 for $600 Mn, are reportedly in talks with investors to raise funds to buy the company back from the Byju Raveendran-led embattled decacorn.

Last month, reports also surfaced that the cash-strapped BYJU’S is looking to raise $800 Mn and $1 Bn by selling Epic and Great Learning to repay its $1.2 Bn Term Loan B.

Amid many challenges faced by the edtech firm, BYJU’S recently missed the deadline to release its much-delayed financial numbers for FY22. The company said it has convened a meeting of its board members in the second week of October to approve and adopt its financial statements for FY22.

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A West Bengal consumer protection panel has pulled up BYJU’S for allegedly engaging in unfair trade practices in yet another case related to refunds. 

According to The Print, the Hooghly District Consumer Disputes Redressal Commission termed the edtech major’s actions as indicative of unfair trade practices while hearing a complaint filed by a local resident. The petitioner alleged that his multiple requests for a refund fell on the company’s deaf ears, putting him through ‘mental harassment.’

In its order passed on September 27, the consumer panel, comprising members Debasish Bhandyopadhyay and Debasis Bhattacharya, noted that the edtech major ‘deliberately tried to be indifferent’ in entertaining the refund request and tried to mislead the complainant. 

Subsequently, the panel directed BYJU’S to refund the course amount of INR 65,000, the cancellation charge of INR 9,498 and an additional INR 5,000 as compensation for harassment and mental agony. 

“… this commission is of the view that the BYJU’S, in spite of giving specific assurances about the refund of the entire amount in case of dissatisfaction after the 15 days trial, deliberately tried to be indifferent towards the said refund and misled the complainant in one way or the other,” the commission noted.

BYJU’S declined to comment on the matter. 

No Refund Despite Multiple Requests

In his plea, the complainant, Subhrajit Das, alleged that he bought a BYJU’S course for his daughter last year for an instant payment of INR 5,000. Subsequently, Das paid the remaining amount of INR 60,000 by taking a loan from a private finance company, which was to be paid in monthly instalments. 

Curiously, the loan was also arranged by the edtech company’s authorised agent. Afterwards, BYJU’S reportedly sent a tablet to Das via a courier service provider.

As per the complaint, Das was also assured by the BYJU’S executive that the entire amount would be refunded if the user conveyed its dissatisfaction with the product within 15 days of the delivery of the product. In July 2022, Das wrote to the company within 15 days seeking cancellation of the service and a refund. 

Subsequently, the representative asked the complainant to pay an additional amount of INR 9,498 through UPI for cancelling the course. As per the order, Das is said to have paid the amount and received reassurance that no further amount would be deducted from the complainant’s account towards payments for monthly instalments. 

However, deductions from the bank account of the complaint continued without any further communication from the edtech major. Eventually, in February, Das approached the consumer protection commission, demanding a refund. 

In its order, the commission agreed that the complainant intimated the matter to all concerned quarters by several mails and letters without any result. The panel also added that the entire developments indicate unfair trade practice and malafide intention on the part of BYJU’S.

The order was reportedly issued ex-parte, meaning the judgement was passed without hearing BYJU’S as nobody appeared on behalf of the edtech giant. The order stated that BYJU’S only submitted a written response where it expressed its intention to issue a refund to Das.

This comes days after it was reported that the troubled edtech major was looking to turn profitable by March 2024, even as it continues to deal with a potential debt crisis, delayed financials, mounting losses and mass layoffs. 

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The founders of Great Learning, the edtech startup acquired by BYJU’S in 2021 for $600 Mn, are reportedly in talks with investors to raise funds to buy the company back from the Byju Raveendran-led embattled decacorn.

The management buyback arrangement will enable the founders to run the edtech firm and secure equity payouts in return, Mint reported.

The prospective incoming investor has an interest in the continued involvement of the founding team and existing management of the company. As discussions unfold, various structural possibilities are being explored to shape the eventual arrangement, the report said citing a source.

As per another source, the founders may consider negotiating an additional equity stake with an investor consortium following the potential buyback.

The discussions surrounding Great Learning are currently in their preliminary stages. It is anticipated that a formal process will be initiated once the Epic deal progresses to a more concrete stage.

Last month, it was reported that the cash-strapped BYJU’S is looking to raise $800 Mn and $1 Bn by selling Epic and Great Learning to repay its $1.2 Bn Term Loan B.

Founded by Arjun Nair, Hari Nair, and Mohan Lakhamraju in 2013, Great Learning offers comprehensive, industry-relevant programs across various technology, data and business domains.

The latest development comes at a time when BYJU’S is fighting multiple battles. Besides the controversy over the repayment of its $1.2 Bn loan, delay in publishing its financial statements, resignations of board members and auditors, among others, have hit the edtech decacorn hard.

The edtech startup recently missed the deadline to release its much-delayed financial numbers for FY22. The company said it has convened a meeting of its board members in the second week of October to approve and adopt its financial statements for FY22.

Amid the troubles, BYJU’S is also looking to fire over 4,000 employees in a restructuring exercise.

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