Edtech major BYJU’S is set to clear offline test prep major Aakash’s remaining balance on September 23.
According to BYJU’S unqualified financials for FY21, seen by Inc42, the edtech major has INR 1,983.49 Cr ($249.6 Mn) pending in cash payments to clear the Aakash deal. Notably, the pending amount accounts for a quarter of the total deal amount.
Apart from the cash payments, the edtech decacorn also has to pay INR 2,007.74 Cr in equity after the merger of the two entities is completed.
Thirty-three years old Aakash was acquired by BYJU’S in a deal worth nearly $1 Bn in April 2021 to enter the offline space and the test prep space.
The acquisition was the largest edtech deal in India ever and since then, BYJU’S has made a number of big acquisitions. BYJU’S peers, Unacademy and PW also have since adopted the phygital model as the effects of the pandemic continue to be minimal and normalcy resumes across the country.
It is prudent to mention that BYJU’S has deferred the payment to Aakash’s backers multiple times over the last few months. The first of such deferments came in June this year when media reports suggested that the edtech decacorn will defer the payments till August 2022.
Blackstone, the largest stakeholder in AESL, is reportedly due $180 Mn. The PE firm holds a 37.5% stake in the offline test prep major and was up for a $400 Mn exit.
Media reports from August stated that BYJU’S is set to clear the rest of the payment to Blackstone by the end of September; it is reasonable to assume that most of the $249.6 Mn BYJU’S is set to clear on September 23 are going to Blackstone.
BYJU’S has come under the spotlight since yesterday as the company’s unqualified financial results for FY21 were finally seen. The financials came 18 months after the end of FY21 and 12 months since the edtech major started getting the per-day penalty per the Company Law.
The edtech major reported a loss of INR 4,588 Cr for FY21, 19.8X higher compared to a loss of INR 231.69 Cr in FY20.
BYJU’S saw its expenses balloon to INR 7,027.4 Cr, 144% up from INR 2,873 Cr in FY20. At the same time, its total income reduced 3.3% to INR 2,428.3 Cr in FY21 from INR 2,511.7 Cr in FY21.
The edtech giant stated various reasons for a sheer rise in losses, ranging from a high cash burn of its subsidiary WhiteHat Jr to a new revenue recognition system that saw a significant chunk of revenue deferred to subsequent financial years.