Byju is an educational company from India providing online classes for school and collegegoers. Byju’s was in recent news for not submitting an audit report for more than 17 months. The think & learn app from Byju help domestic, overseas, primary and secondary level students. The headquarters is in Bangalore. ByjuRaveendran, an engineer by profession and teacher by passion since 2006. The business started by providing videos for competitive exams and K-12 exams. The company dealings in 2022 were it collaborated with unaacademy, Simplilearn, upgrade, Vedantu and preplnsta prime. The company signed a contract for R&D in Doha with the Qatar investment authority. The blog digs deep into the business of Byju to know the challenges.
History of Byju’s:
The financial statements for the year ended March 31, 2021, were not submitted to the Indian government. The delay is due to more acquisitions and consolidation from different business partners. Deloitte is the auditor of Byju’s. The education start-up face problems in the consolidation of accounts. New York-based company Tiger global management invested $200 million in education technology. Because of this investment, the company’s valuation raised to 45 per cent. $8 billion is the value assessed by the experts. The list of partners for Byju’s educational tech company is as follows: Tencent, Naspers, Verlinvest, Chan-Zuckerberg initiative, Lightspeed, sequoia, venture partners, and Aarin capital. The founder ByjuRaveendran mentioned in an interview that these partners satisfy the vision of the business. The long-term vision of the company is to create a change in the learning industry. Tiger Global also invested in agro-tech start-ups and payment start-ups. The Ninja cart is the agro-start-up funded by the Tiger global management. Razor pay, the start-up company, is a payment solution provider partnered with Tiger Global management.
The company is said to have faced 2,400 crores of consolidated loss. The experts say that the 3 million paid subscribers and 42 million registered users will turn the loss into profits. Year on year, the quantum of loss is getting reduced. In the financial year 2018, the company recorded a loss of 37 crores. In 2019, the loss was reduced and stood at 15 crores. The year 2020 is recorded with a loss of 1,480 crores. Byju is amidst a challenging market where customer retention enhances profits. Experts say that the content is standard for all students irrespective of their learning capacity. According to the India Brand Equity Foundation, the online education business is expected to double the revenue of India.
Top challenges faced by Ed-Tech start-ups:
Chan Zuckerberg Initiative is a company that supports education and helps for eradication of diseases. Big companies get funding and invest more in reaching global audiences and marketing. Small companies have no other choice but to close their business. The reasons are listed below:
Customer is the king of the digital media businesses. So, customer acquisition, customer retention, and customer value are the crucial areas of focus. Low price and high quality is the reason for choosing online education providers. Reputation is the image that attracts customers. Reputation comes through personalised relationships. Virtual companies cannot get a reputation from direct contact. They build their image on low-cost, informative content and personalised teaching. As like human resource consultancies offer the option of paying fees after getting a job. Edtech companies are offering the option of paying after passing the examination. This offer creates uncertainty. Examples of other educational businesses facing losses are VIP kids from China, OPM Company 2U from the US, and Chegg from California are struggling in the same line of profitability. The above companies are reported with a loss. They are setting up digital strategies to acquire the market and gain profits.
The course structure and learning purpose should be in line. Satisfaction comes from fulfilling the purpose. Tutoring companies teach with a leap of the syllabus coverage. They teach what schools teach. They train the students to be competitive with the same syllabus. They are not teaching different angles of the same subject. They teach the same angle with little more clarity. The content for the school children is syllabus-based. The content for college students is subject-based. They want to learn something out of the syllabus and dig deep into the subject. Course structure according to the audience is crucial. Educational providers like Byju need to structure the course content according to the readers’ age and interests. Customisation as per the country, age and interest renders better results and customer satisfaction. School children spend less time learning. On the contrary, college students spend more time. Maintaining the right time helps for enhancing the interest.
The lessons learned from Covid19 thrust the young generation towards online learning platforms. As a sign of growing demand for online courses, big educational institutes like IIT are offering online courses for data science and artificial intelligence. As big players are planning to play the game, it hampers the small players. The competition is high in the educational sector. Technically speaking, the user experience and social elements grab the attention of the readers. Group discussion, group projects, group chat and doubt sessions are some of the elements that fuel social learners. The UI and UX of the product also attract learners. To withstand in the industry, companies need to compare the product model and social elements of the competitors from time to time. There is fluctuation in the market happens because of marketability. So, to remain competitive companies think about the competitive element.
Difficulty in the consolidation of accounts and acquisition:
By doing many acquisitions, companies face problems with the consolidation of accounts. The reasons for these issues are the payment gateways and intercompany transactions. The payment gateway is different from business to business. Payment failure, no auto pay option, fewer payment modes, and integration issues are the issues of the digital way of payments. Digital payments with efficient service will help for increasing profits. The track of profits helps for consolidating the accounts with ease. The large EdtechstartupsUnacademy, Vedantu, UpGrad and Byju’s are joining hands to form a code of conduct for the Edtech companies. These companies have formed a body called the India Edtech consortium. The adjustments for transactions between two subsidiaries, subsidiary to the parent company, and parent to the subsidiary company are different. Understanding the three categories help the companies to track the right financial figures.
Recording transactions and making profits are creating stress for online businesses. Digital business strategies and financial planning from veteran chartered accountants, and cost accountants help to overcome the problems.