BYJU’S in Hot Water: What exactly is happening?

BYJU’S: Edtech giant is facing a series of crises, including the resignation of three board members, the exit of its statutory auditor, and mounting losses.

The company’s troubles began in August 2022, when Deloitte, its statutory auditor, expressed an adverse opinion on its financials for the year ended March 2021. The auditor said that BYJU’S had material weaknesses in its financial reporting, including the way it accounted for the sale of its multi-year plans and courses.

In September 2022, BYJU’S filed its financials for FY21 with regular accounting bodies in India, nearly 18 months after the financial year ended. The filing was delayed due to the ongoing audit by Deloitte.

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Troubles at the Mount

In December 2022, three board members —Vivian Wu of the Chan Zuckerberg Initiative, GV Ravindran of Peak XV Partners (formerly Sequoia Capital India and SEA), and Russell Dreisenstock of Prosus Ventures—resigned. BYJU’S has denied the news, but the resignations have raised concerns about the company’s governance.

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In January 2023, Deloitte resigned as BYJU’S statutory auditor. The auditor said that it had not been able to commence the audit for FY22 due to the lack of cooperation from the company.

What’s Next for the Company?

BYJU'S

It remains to be seen whether BYJU’S will be able to weather the current storm. The company has a strong brand and a large user base, but it will need to address its financial and governance issues if it wants to regain the trust of investors and customers.

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The troubles come at a time when the edtech industry is facing headwinds. The sector has been hit by a slowdown in funding, as well as concerns about the effectiveness of online learning.

Only time will tell whether BYJU’S can overcome its current challenges and continue to grow. However, the company’s future will likely depend on its ability to address the concerns that have been raised about its financial reporting and governance.

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