BYJU’S Secures INR 300 Cr Loan From Subsidiary Aakash
Summary
In this case, the principal business activity is marketing for the core business of BYJUS Aakash on which the group has already spent and is now being reimbursed, said BYJUS.The startup says that it buys media spots in bulk for all its group companies to benefit from economies of scale.The development was first reported by The Morning Context.The move comes a month after BYJUS paid $234 Mn in dues owed to private equity firm Blackstone as part of the $950-Mn acquisition deal of offline test prep giant Aakash Educational Services. Mounting losses, rising expenses, high customer acquisition costs (CAC) and delayed financial results have also attracted the ire of industry veterans who have questioned the corporate governance of the edtech major.In the financial year 2020-21 (FY21), BYJUS losses surged nearly 20 times to INR 4,588 Cr, while revenue from operations tanked 3.3 % to INR 2,428.3 Cr.In a bid to cut corners, BYJUS has shelved expansion plans and fired more than 4,000+ employees in mass layoffs across product, content, media, and technology verticals. Earlier this week, it also shut down its Thiruvananthapuram office as part of an ongoing restructuring exercise.While it aims to become profitable by the end of FY23, the startup has refused to tinker with new cash-guzzling and largely unsuccessful products such as celeb-led courses.Funding also appears to be a little scarce. Despite the ongoing market volatility and negative sentiment, the startup announced that it raised $250 Mn in equity and debt from existing investors, including Qatar Investment Authority in October 2022.Interestingly, reports had surfaced at the time that said that the startup had turned down funding by new investors at a valuation of $11-12 Bn, instead settling for its current $22 Bn valuation.As everything goes south for the edtech major, it remains to be seen how it will pull itself out of the quagmire. As negative market sentiment refuses to abate and as edtech fatigue peaks, Indias modest valued startup is at a crossroads to decide its future.