BYJU's Edtech Giant: Challenges on the Path to Profitability and Funding
Edtech major BYJU's is in final stages to raise $250 million at a lower valuation, struggling to repay loans and achieve profitability by March 2023.
24 March 2023
Edtech major BYJU's is reportedly in advanced stages to raise $250 million at a valuation lower than its last valuation of $22 billion.
The company is struggling to repay a $1.2 billion term loan and achieve profitability by March 2023, despite restructuring and cost-cutting measures.
In order to turn profitable, BYJU's is winding up its coding platform WhiteHat Jr, which it acquired for $300 million. The company's quarterly results are also delayed.
BYJU's, the Indian edtech giant, is reportedly seeking to raise $250 million at a lower valuation than its last announced figure of $22 billion. The company is facing significant financial challenges, including a $1.2 billion term loan that needs to be repaid, and has struggled to turn a profit in time for its target of 2023. While the latest funding round is in its final stages, sources say that the company will be unable to secure the $500 million it was hoping for due to the lower valuation.
To cut costs and increase profitability, BYJU's has announced that it is winding up its coding platform, WhiteHat Jr. The company acquired WhiteHat Jr. for $300 million, but says it is "merely optimizing it" as part of its restructuring efforts. Despite these measures, however, BYJU's still appears to be struggling to achieve profitability. The company has already laid off thousands of employees, and is facing mounting losses at the group level.
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In October of last year, BYJU's CEO Mrinal Mohit announced that the company's cost-cutting measures would help it achieve profitability by March 2023. However, it appears that this target is now unattainable, with the company still unable to stem its losses. Furthermore, BYJU's quarterly results for the current fiscal year are delayed once again, and there has been no communication from the company since it reported a revenue of Rs 4,530 crore between April and July of 2022.
Despite these challenges, BYJU's remains a major player in India's edtech market, and its latest funding round is a testament to its continued growth potential. However, it remains to be seen whether the company can turn its fortunes around and achieve profitability by its revised deadline.