Indian education technology start-up Byju’s will not renew its jersey sponsorship deal with the Indian cricket team, the company’s co-founder Divya Gokulnath told CNBC.
In an in-depth interview, Gokulnath spoke about the road to profitability and the potential for an IPO for Byju’s, one of India’s most valuable private technology companies.
Based in Bangalore, Byju’s offers online classes to students in a variety of subjects. It has 150 million students around the world, 25% of them outside of India.
Star Indian batsman Virat Kohli pictured. Indian education start-up Byju’s has featured its logo prominently on Indian cricket team’s shirts.
Munir Uz Zaman | AFP | Getty Images
The company’s losses boomed in its fiscal year, which ended in March 2021, the latest public numbers showed. Gokulnath attributes this to a change in revenue recognition. Rather than accruing revenue when a person has paid for a course, it is instead billed when the specific course begins.
Gokulnath said the company has seen improvements over the past 12 months.
“We’re doing really well…the last 12 months have been really good for us in terms of the number of products we’ve added, in terms of the different formats we’ve launched, as well as in terms of geography and themes that we grew into,” Gokulnath said.
The co-founder added that the company will “hopefully” become profitable by the end of its fiscal year, which ends in March 2024.
This will include a reduction in branding and marketing costs. Byju’s was the official sponsor of the FIFA World Cup in Qatar last year. The company also has a sponsorship deal with the Board of Control for Cricket in India, the governing body of the sport in the country. Cricket is the biggest sport in India, a country with a population of more than 1.4 billion people.
Byju’s logo currently appears on the jersey of the Indian cricket team. But Gokulnath told CNBC Byju that he will not renew the deal after March is up.
Byju’s is reportedly valued at $22 billion. Gokulnath says the company wanted to go public last year but that market conditions deteriorated.
Tech stocks came under pressure around the world as the US Federal Reserve and other central banks quickly hiked interest rates to combat rampant inflation.
An IPO is still on the cards if the market improves, Gokulnath said.
“Even early last year we were considering several options to go public. But the thing is, we have the luxury of choosing when, where and how we want to do this,” Gokulnath said.
“We want to do this at a time when we don’t have to give up the potential of the company. Because many internal processes are in our control, but not the external environment, and we want both to do really well before going down the IPO route.”
https://www.cnbc.com/2023/01/20/byjus-plans-to-end-sponsorship-of-indian-cricket-team-jersey-as-it-puts-profitability-on-cards-for-2024.html Byju’s plans to end sponsorship of Indian cricket team’s shirt as it puts profitability in jeopardy for 2024