Although it isn't unusual for startups to be late with their financial reports, Byju's is 15 months late with its March 2021 financial reports according to The Ken. The ed - tech industry's investors and competing ed - tech executives are worried about the delay in filing.
“If Byju’s fails, it will have negative implications for the entire startup sector in India. Over half the VCs have exposure to Byju’s,” says an edtech founder.
An in-depth questionnaire sent by The Ken was not answered by Deloitte, their auditor.
Byju's spokesperson responded to questions by saying the delay was due to “multiple reasons”, among them was the long list of acquisitions, like Akash, Whitehat Jr., and Scholr, made by the ed- tech startup. The spokesperson also blamed a lack of audit bandwidth - the company has seen a fivefold increase in size.
“Byju’s tends to book 55-60% of even multi-year subscriptions upfront,” said one of the sources. Unlike other educational technology providers, which largely sell software products like apps and web-based courses - Byju's has always packaged hardware with their software.
“Earlier it used to be memory cards. Now it’s tablets. That gives Byju’s some leeway to book all their revenue upfront,” they added.
Byju's is able to book revenues in advance by partnering with lenders who help consumers finance a course. It also helps to make the courses appear more inexpensive, which has been a long-standing strategy employed by Byju's, the customer feels better off paying something like Rs 2,000 ($26) a month for two years instead of close to Rs 50,000 ($640) up front.
The strategy employed by Byju’s can possibly dilute the edtech’s realised value if a sizable chunk of users default on their payments or cancel their courses.
It should be noted that Byju’s has also entered into an agreement with the state of Maharashtra to offer free education in municipal schools.