BYJU's faces litmus test as edtech bubble bursts in India

For Vipluv, 24, a job offer from the leading edtech company BYJU's was like a dream come true. He, along with four-five of his friends, joined BYJU's as Business Development Trainee-Sales in February this year for a monthly stipend of about Rs 15,000.

After a six-week training, he was promised Rs 45,000 as salary at a location of his choice -- which was Agra or Noida in his case, as he had relatives there to support him on his first stint out of his home-town.

To his shock, after the training period was over, he was asked by the HR team to join Lucknow as his next location, on a salary of just Rs 25,000.

"I decided to quit as it was impossible for me to survive in Lucknow at Rs 25,000. Neither the location or the salary that was promised to me were agreed to. All of my friends resigned as none wanted to go to the locations where they had to struggle to survive," Vipluv told IANS.

As India reopens amid 'hybrid normal' and schools and colleges return to normal, edtech platforms see a significant dip in the demand for online learning and some of such firms have either shut shops or fired employees in recent days.

BYJU's is also facing the heat to keep up with the changing times.

Reliable industry sources told IANS that its global expansion plans have not yet reached the scale it had planned.

Most notable startup under its umbrella that is facing trouble is online coding platform WhiteHat Jr, bought in July 2020 for $300 million.

With WhiteHat Jr, BYJU's aimed to take coding to the world from India, hiring teachers on contractual-basis.

The fact is that the platform earned just Rs 12.34 crore and Rs 11.07 crore from its Australia and UK markets, respectively.

WhiteHat Jr posted a massive Rs 1,690 crore loss in the financial year 2021, while generating an operating revenue of Rs 484 crore in the same period.

The platform's losses skyrocketed in FY21 and its expenses reached Rs 2,175 crore -- compared to Rs 69.7 crore in FY20.

Sources close to the company told IANS that WhiteHat Jr has asked its nearly 3,000 sales and support employees to report to either Mumbai or Gurugram (out of its 5,000-strong workforce that includes teachers which are on contractual-basis hence not full-time employees), from April 18.

It has also shut its schools division that last year targeted to take its flagship coding curriculum to 10 lakh school students by the next academic year.

WhiteHat Jr's also forayed into teaching music online, offering Guitar and Piano. It later launched a specially-curated course to offer immersive learning opportunities for music aspirants across all age groups.

However, this move has also yielded no fruitful results to date, said sources.

In a statement, a WhiteHat Jr spokesperson told IANS that as part of its back-to work drive, "most of our Sales and Support employees have been asked to report to Gurugram and Mumbai offices from April 18."

"Our teachers will continue to work from home. We understand that some of our employees may voluntarily choose not to return to work, in Gurugram and Mumbai. In such cases, the employees are advised to get in touch with HR for next steps," the company added.

Sensing the changing education landscape, BYJU'S recently launched 80 physical tuition centres and plans to increase it to 500 in 200 cities by 2022, providing employment to around 10,000 people, including teachers.

BYJU's has always been on an acquisition spree. It has acquired several heavyweights, like Aakash Educational Services Ltd and Great Learning.

In July 2021, it acquired Epic! for $500 million; US-based Osmo for $120 million in January 2019 and in July 2017, it acquired TutorVista, Edurite from Pearson.

Last month, it announced a new partnership with QIA, the sovereign wealth fund of Qatar, to launch a new edtech business and state-of-the-art research centre in Doha.

According to the company, the future of education will bring the best of the online and offline world together.

"Learning eventually will combine asynchronous online elements with synchronous elements. For us, India will continue to be a major focal point, as we go deeper into the country to create value in our learners' lives," a company's spokesperson told IANS.

"We have and will continue to grow through both organic and inorganic routes. Overall, our products are global, localised to every country and personalised to every learner," the spokesperson noted.

However, the winds of change in the edtech space are set to affect the edtech giant too.

Byju Raveendran, founder and CEO, has reportedly financed his recent $400 million investment in the company through a debt he raised from multiple international banks, as the edtech giant plans for an IPO.

It is a rare gesture to see a founder invest in a startup that is about to file for an IPO.

The stark truth is that the lay-off season has begun in the Indian startup ecosystem.

Edtech platform Unacademy recently laid off nearly 600 employees, contractual workers and educators -- about 10 per cent of its 6,000-strong workforce across the group.

In a nightmare for nearly 1,000 employees, homegrown edtech startup Lido Learning which is backed by top entrepreneur Ronnie Screwvala, apparently shut operations in February, forcing its workforce to seek help via social media platforms.

How far can BYJU's avoid a strong headwind in the online education space? Time will tell us shortly.

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