{"id":11274,"date":"2022-12-08T11:06:54","date_gmt":"2022-12-08T05:36:54","guid":{"rendered":"https:\/\/www.tickertape.in\/blog\/?p=11274"},"modified":"2022-12-19T11:48:00","modified_gmt":"2022-12-19T06:18:00","slug":"is-edtech-giant-byjus-under-trouble","status":"publish","type":"post","link":"https:\/\/www.tickertape.in\/blog\/is-edtech-giant-byjus-under-trouble\/","title":{"rendered":"Is Edtech Giant Byju\u2019s Under Trouble?"},"content":{"rendered":"\n<p>I learned this basic thumb rule of mathematics in my primary school \u2013 when two negatives meet, they are added, but the sign remains negative. Many Indian startups learn this the hard way by acquiring other loss-making startups and creating bigger losses for investors. In this article, let\u2019s learn about one such Ed Tech startup, none other than Byju\u2019s.&nbsp;<\/p>\n\n\n\n<p>Many people have spoken about the acquisitions done by Byju\u2019s like Great Learning (for $600 mn), White Hat Junior (for $300 mn), Aakash Educational Services (for $1 bn) and the list continues. But there is something more important than these acquisitions.<\/p>\n\n\n\n<p>Before jumping into it, let\u2019s understand how Ed Tech platforms gained demand.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_66_1 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.tickertape.in\/blog\/is-edtech-giant-byjus-under-trouble\/#Why-was-there-a-need-for-Ed-Tech-platforms\" title=\"Why was there a need for Ed Tech platforms?\">Why was there a need for Ed Tech platforms?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.tickertape.in\/blog\/is-edtech-giant-byjus-under-trouble\/#How-do-Byjus-convince-parents-to-pay-such-huge-amounts\" title=\"How do Byju\u2019s convince parents to pay such huge amounts?\">How do Byju\u2019s convince parents to pay such huge amounts?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.tickertape.in\/blog\/is-edtech-giant-byjus-under-trouble\/#Financial-disclosures-of-Byjus\" title=\"Financial disclosures of Byju\u2019s\">Financial disclosures of Byju\u2019s<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.tickertape.in\/blog\/is-edtech-giant-byjus-under-trouble\/#Why-is-human-capital-not-used-efficiently\" title=\"Why is human capital not used efficiently?\">Why is human capital not used efficiently?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.tickertape.in\/blog\/is-edtech-giant-byjus-under-trouble\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why-was-there-a-need-for-Ed-Tech-platforms\"><\/span><strong>Why was there a need for Ed Tech platforms?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Any industry you work in has become excessively competitive, and everyone wants to make their kid the \u2018perfect\u2019 kid. In this race, many parents have forgotten that every kid is special individually. We all have heard this amazing quote by Albert Einstein \u201cEverybody is a genius. But if you judge a fish by its ability to climb a tree, it will live its whole life believing it is stupid.\u201d Little do we go by this quote. Hence the need for a platform that helps <a href=\"https:\/\/www.tickertape.in\/blog\/international-students-day-2021-investing-lessons-to-learn-from-students\/\">students<\/a> memorise content began.<\/p>\n\n\n\n<p>During the Covid-19 lockdown, the offline mode of education was impossible, and students were not serious about the online mode of education, which eventually affected their learning. This gave raise to platforms like Byju\u2019s, which provides engaging content for the students.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How-do-Byjus-convince-parents-to-pay-such-huge-amounts\"><\/span><strong>How do Byju\u2019s convince parents to pay such huge amounts?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>It has become a misconception that if a student does not score well in school and college, they are worth nothing. Ed Tech platforms use this misconception to scare uninformed parents and make money from them. Byju\u2019s is not to be blamed for this fire, but it has added fuel to this fire.<\/p>\n\n\n\n<p>According to an article by TFIpost, \u201cIt is a tactic of the ed-tech company that they ask children difficult questions which ultimately leads to the inability of the students in answering them.\u201d<\/p>\n\n\n\n<p>So after a student takes these tests, a series of cold calls are started, and every sales manager runs behind the parents to enrol their kids into the Edtech platform for a better future. Most of the parents are left out with no choice other than enrolling.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Financial-disclosures-of-Byjus\"><\/span><strong>Financial disclosures of Byju\u2019s<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In July 2022, Karti Chidambaram, a member of the Lok Sabha, called Byju\u2019s accounting irregular and stated that when the firm has such huge layoffs, it is very clear that they are not in a sound state of financial health. Mr Chidambaram has written a letter to the ICAI (Institute of Chartered Accountants of India) to check the company\u2019s books. The lawmaker has urged the institute to investigate the company&#8217;s financial statements. However, Chidambaram has highlighted some red flags in its financial statements for FY 2021. He pointed out that these statements are 18 months late, \u201cnearly missing four deadlines.\u201d<\/p>\n\n\n\n<p>The minister has commented on a part where Byju\u2019s stated 81% of the revenues in FY 2021 came from the sale of Edu Tech products. He questioned this model, stating, \u201cIs it not a blatant misinterpretation of facts to classify hardware products as EduTech.\u201d<\/p>\n\n\n\n<p>He also specified that the company has shown 60% of its employee costs as capital expenditure is expensed on the profit and loss, show losses of about Rs. 5,000 cr.<\/p>\n\n\n\n<p>Also, the firm has violated revenue recognition policies. It is a standard practice that revenue should be recognised upfront. In the case of a subscription, it should be recognised when the service is being provided.<\/p>\n\n\n\n<p>For example, if you buy a subscription to any OTT platform, you pay the subscription fees in advance but use the service for at least three months. So the company has received the money from you and can recognise it only after the period gets over. If you have used 50% of the subscription time (1.5 months), in this case, the company will recognise 50% as the remaining 50% of the service is yet to be provided.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why-is-human-capital-not-used-efficiently\"><\/span><strong>Why is human capital not used efficiently?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Over time, many employees refused to work with Byju\u2019s and have come out to speak about their work culture. As per the employees, Byju\u2019s promises Rs. 10-12 lakh per annum salary to people, and after joining, they undergo vigorous training. However, the salary during training is Rs. 15,000-20,000, which is based on attendance and the number of hours given for calling the parents. The employees are given a particular target to call parents multiple times from databases and convince them that their kid gives an exam. To convert their jobs to full-time, they have to sell the course to a certain number of students in a particular period.<\/p>\n\n\n\n<p>Due to this hard selling, the NCPCR (National Commission for Protection of Child Rights) has summoned Byju Raveendran, CEO of Byjus. The NCPCR statutory body chairperson Priyanka Kanoongo has stated in a media interaction that they have summoned the CEO of the Ed-tech giant because of guideline violations. The summon has been due to a claim in a media article by several parents who stated they had been defrauded by K12 online tutoring by taking away their life savings and ensuring a bright future for their kids, but it was the opposite.<\/p>\n\n\n\n<p>According to an article in the Economic Times, \u201cThe commission has asked Raveendran to appear in person before 2 PM on 23 December 2022 to respond to the allegations. It also instructed him to provide details of all the courses run by Byju\u2019s for children, the structure of the courses, fee details, number of students enrolled in courses, refund policy, legal documents recognising Byju\u2019s as a valid ed-tech company, and other documents, during his appearance.\u201d<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><strong>Conclusion<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>While it has already been tough for most students to compete in the external environment, it would be great if platforms like Byju\u2019s would make education more practical so that students understand what they are learning. Though Byju\u2019s did not create this system, it can be a platform for making this education better and more practical. There is a huge demand for such platforms that will help India to bridge the gaps and increase the skills of the youth. The youth is our hope to go towards a $5 tn economy.&nbsp;<\/p>\n\n\n\n<p>Covid, everyone remembers the lockdown. Offline mode of education was not possible, and students had started to ignore studies in the online mode, and their learning suffered. This again increased the demand for a platform like Byjus to instruct students through videos and content.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Edtech giant Byju&#8217;s reported a net loss of Rs. 2,702.14 cr. in FY 2021. Read about the financial disclosures of Byju\u2019s, their mass layoffs and more.  <\/p>\n","protected":false},"author":111,"featured_media":11317,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_lmt_disableupdate":"no","_lmt_disable":"no","footnotes":""},"categories":[1744],"tags":[],"acf":[],"modified_by":null,"jetpack_featured_media_url":"https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2022\/12\/05-Dec-22-Whats-going-wrong-with-Byjus-Dhruv-Rathod_-.png?wsr","_links":{"self":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/11274"}],"collection":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/users\/111"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/comments?post=11274"}],"version-history":[{"count":3,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/11274\/revisions"}],"predecessor-version":[{"id":11435,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/11274\/revisions\/11435"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media\/11317"}],"wp:attachment":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media?parent=11274"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/categories?post=11274"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/tags?post=11274"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}