Byjus’ planning to shut down loss making White Jat Jr.

Amidst mounting losses and the pressure from investors to turn profitbale, Byjus’ is in discussion to shut down one of its verticals White Hat Jr. It is a coding platform which was acquired by Byjus in 2020 for over $300 million.

During the pandemic the edtech was going in full flow going from strength to strength in terms of user acquisition. But post pandemic when the students started going back to schools it had a tremendous hit on the edtech sector. However, a closer look at these so called boom period during the pandemic reveals a darker side. Although these edtech startups especially Byjus was growing in terms of user base tremendously but it was not reflecting in its financial statements. Some allege inflated numbers.BUt the fact of the matter is the losses had also been mounting at a behemoth pace at BYjus. It was spending hugely to acquire customers. For every penny earned they had to spend more than 100 bucks to acquire them.

With the funding winter, the investors’ losing patience Byjus has been in a tough spot since the past year with a mounting pressure to turn profitable. With an eye on profitability, Byjus is in discussions to shut down the coding platfrom White Hat Jr which had ample opportunities according to Byju Raveendran.

WhiteHat Jr has been running on losses. It reported a total loss of ₹1,690 crore in FY21. Between 1 April, 2020 to 31 March, 2021, the startup earned ₹483.9 crore from its operations, while posting a total expense of ₹2,175.2 crore.

Another controversy related to the acquisition is that the founder of White Hat Jr departed prematurely. The earlier-than-anticipated departure of founder Karan Bajaj meant that some of the milestone-related payments promised to Whitehat Jr. founder were not fully paid, but this did not reduce the cost of the $300 million cost of acquisition.