BYJU’s cut marketing spends by 20 percent in FY23: Report

BYJU’S is expected to report total revenue of around Rs 6,500 Cr in the financial year 2022-23 or FY23, which ended March 31, 2023, according to sources close to the management, as per Inc42 report.

This would be 23 percent higher than the consolidated income of Rs 5,298 Crore reported by parent entity Think & Learn Private Limited in FY22. BYJU’s is yet to submit audited financials results.

In the recent past, the Board of Control for Cricket in India (BCCI) has claimed that Byju’s has defaulted on a payment of Rs 158 crore. It has approached the National Company Law Tribunal (NCLT) at Bengaluru to initiate corporate insolvency proceedings against the beleaguered edtech company. The case is called BCCI v. M/s. Think & Learn Pvt. Ltd.

Sources also told Inc42 that BYJU’S has touched a revenue of INR 3,500 Cr in the first six months of the ongoing fiscal year (H1 FY24), with the company expecting to continue this revenue rate for the full year.

The company is said to be seeing close to Rs 200 crore in monthly sales, but revenue collection challenges persist due to the discontinuation of partnerships with non-bank financial company (NBFC) lenders.

BYJU’S net loss surged 81 percent YoY to Rs 8,245.2 crore (close to $1 Bn) in FY22 as WhiteHat Jr and other loss-making acquisitions continued to weigh down the bottom line. In FY22, the startup’s total expenses nearly doubled to INR 13,668 Cr.

Questions sent to BYJU’S about the FY23 and FY24 financials didn’t elicit any response at the time of publishing the story. We will update the story if and when the company responds to the claims made by sources.

Sources, who were privy to the documents shared with investors, added that the company has reduced its overall expenses significantly, especially in the marketing and employee benefit costs.

The Bengaluru-based startup is said to have reduced marketing expenditure in FY23 by around 20 percent, and cut the employee costs by 30 percent. Further in H1 FY24 or as of September 2023, the company is said to have cut its marketing and employee costs by 13% and 16% respectively.

For context, BYJU’S FY22 ad expenses stood at INR 4,144 Cr or 30 percent of the total expenses, and employee benefit expenditure of INR 3,552 Cr was around 26 percent of the total expenditure.

This is in line with the layoffs at the cash-starved company — BYJU’S has already laid off over 6,000 employees since early 2022, with around 12,000 employees currently engaged with the company. At its peak, BYJU’S had an employee count of around 50,000, so it has shed over 75% of the workforce since 2022.

Without a look at the net profit or EBITDA numbers for FY23 and FY24, it’s hard to state whether these cost-cutting measures have helped the company show improved profitability.

In the past few months, key members of the board such as Russell Dreisenstock of Prosus, Chan Zuckerberg Initiative’s Vivian Wu, and Peak XV Partners’ GV Ravishankar resigned and the company is being probed by the Enforcement Directorate for an alleged Foreign Exchange Management Act (FEMA) to the tune of INR 9,000 Cr.