Byjus To Expand Tuition Centres With An Eye On Profitability In 2023

While in the latest note, the company didn’t specify a particular month on when it is targeting to turn profitable, it said in October that it is aiming to achieve the feat by March 2023.

In the financial year 2021, the Tiger Global-backed company’s loss widened to ₹4,589 crore from a loss of ₹232 crore incurred in the fiscal before. It is yet to file its financial results for FY22 with the Registrar of Companies.

To meet its profitability target, Byju’s has now shifted its focus towards sustainable growth from exponential growth – a change it was expecting only to begin in 2024. “The macroeconomic changes of 2022 meant that we had to embark on the path to profitability this year itself," said Ravindran, who calls 2022 a ‘rocky year’ for the company. Failure to file FY22 results by September 2022 breached covenants for its overseas $1.2 billion term loan B, a Bloomberg report this month said

However, the shift in momentum also forced Byju’s to lay off around 2500 employees across product, content, media and technology teams. The cost cuts are likely to help achieve better unit economics and prepare the ground for its initial public offering.

“The prevailing macroeconomic conditions and the integration of our acquired companies made this (layoffs) inevitable. We have also shifted our sales model towards inside sales, which is a result of BYJU’S strong brand visibility and deep customer trust," said Raveendran.

Byju’s recently raised $250 million in a rights issue from its existing investors to fuel its growth. It also bagged ₹300 crore via a collateral-free loan from its wholly-owned subsidiary Aakash Educational Services.

At the core of the company’s growth and profitability plans for 2023 are offline education centres. It opened over 300 such centres in 2022 alone and also runs more than 300 Aakash BYJU’s centres. In 2023, the company expects to have a total of 850 offline centres that will serve K-12 and test-prep segments.

Raveendran said that the firm will achieve the “elusive edtech triad", which includes physical classrooms, digital platform(s), and hybrid centre. “We can now serve our 150 million learners through our classrooms, apps and hybrid centres."

Sharing an update on the company’s not-for-profit initiative BYJU’S Education For All, Raveendran said that more than 5.5 million underserved Indian children now have access to world-class education, free of cost. It is confident of doubling the number with Lionel Messi as the brand ambassador of the programme.