Indian education technology start-up Byju’s will not renew its jersey sponsorship deal with India’s cricket team, the company’s co-founder Divya Gokulnath, told CNBC.
In a wide-ranging interview, Gokulnath spoke about the path to profitability and the potential for an initial public offering for Byju’s, one of India’s most valuable private technology firms.
The Bangalore-based Byju’s delivers online classes to students in various subjects. It has 150 million students across the world, of whom 25% outside of India.
The company’s losses boomed in its financial year that ended in March 2021, its latest public figures showed. Gokulnath attributes this to a change in revenue recognition. Instead of revenue being accounted for when a person paid for a course, it is instead calculated when the specific course begins.
Gokulnath said that the company is seeing improvements over the last 12 months.
“We are doing really well … the last 12 months have been really good for us in terms of the number of products that we’ve added, in terms of the different formats that we’ve launched and in terms of the geography and the subjects that we’ve scaled into,” Gokulnath said.
The co-founder added that the company will “hopefully” become profitable by the end of its financial year, which concludes in March 2024.
This will involve cutting down on branding and marketing expenses. Byju’s was an 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 for 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 Indian cricket team’s jersey. But Gokulnath told CNBC Byju’s will not renew the deal after its March expiry.
Byju’s reportedly has a valuation of $22 billion. Gokulnath says that the company was looking to go public last year, but that market conditions deteriorated.
Tech stocks globally got hammered, as the U.S. Federal Reserve and other central banks rapidly raised interest rates to fight rampant inflation.
An IPO is still on the cards when the market improves, Gokulnath said.
“Even early last year, we did think of multiple options to go public. But the thing is, we do have the luxury to decide when and 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 on the potential the company has. Because a lot of internal processes are in our control but not the external environment, and we want both to be doing really well before we go the IPO way.”