Byju’s is the first Indian company to sponsor the FIFA 2022 World Cup officially. Byju’s valuation is 22 billion dollars, But Byju’s revenue last year was 2400 crores and their loss was 4600 crores. Now the question is, How did Byju’s have a loss of 4600 crores? What are the reasons behind Byju’s loss? And Why is Byju’s Failing?
1. Whitehat Jr Flop
Two years ago during COVID, everyone wanted to learn to code, You’ve probably seen a lot of ads by White Hat Junior saying “Learn to code and change the world!”, “Now every kid in India learns to code, build apps, and change the world.” How children aged 6-7 are lending jobs at Google and giving talks at TED.
I have already told you about the Whitehat Jr. Scam in this “Byjus Is A Scam?”
Many experts believe that the trend of coding has ended now that COVID is over. So, it’s better for Byju’s to shut down White Hat Junior, But the founders of Byju’s don’t want to do that they said that White Hat Junior might be an underperformer, but it has had a huge impact on Indian teachers and students.
Now, You can see this in the White Heart Junior report. Apart from customers, many employees are leaving White Hat Junior. A few months ago, around 800 employees resigned from White Hat Junior.
Another factor for the loss is that the classes White Hat Junior offers are one-on-one sessions and they’re expensive. This is why many middle-class Indian parents can’t afford those classes. Hence, it’s difficult for the company to win many customers in India.
This is why the founders of Byju’s want to expand White Hat Junior to other markets. To launch it in a different country, the company needs more money. This is why White Hat Junior is responsible for 26% of Byju’s losses.
This is why White Hat Junior is the biggest loss-making company in Byju’s.
2. Marketing Expenses
You can see their brand ambassadors as big athletes & celebs like Neeraj Chopra, P.V. Sindhu, and Shah Rukh khan. Byju’s has brand deals with the Indian Cricket team and the FIFA World Cup. As you can see, these are big events involving high-profile players. To sign them all as brand ambassadors, Byju’s had to pay a lot of money. Byju’s spent more than Rs 2,000 crores on marketing last year. Byju’s 32% of spending was for marketing last year.
Byju`s strategy is to win customers in other countries using its huge investment in marketing. So, they’re willing to incur a loss in short term to secure a profitable future, But only time will tell whether Byju’s will benefit from this marketing or not.
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