Byju's to Rebrand WhiteHat Jr as Byju's Future School and Completely Merge Operations
WhiteHat Jr, which was acquired by Byju’s for a substantial $300 million in a cash deal three years ago, has been a major loss-making subsidiary due to its high marketing and employee benefit expenses. Byju’s had invested over $100 million into WhiteHat Jr for its expansion since the acquisition. The merger with its parent company will help reduce the overall financial burden, which is critical given the impending financial needs.
Sources indicate that WhiteHat Jr will be rebranded as “Byju’s Future School” with an expanded offline presence. Byju’s Future School is a platform designed to teach coding to children outside of India and has been closely aligned with WhiteHat Jr since its inception three years ago. In addition to the merger, Byju’s will also account for an impairment cost associated with WhiteHat Jr during the current fiscal year.
Over the past few months, Byju’s has significantly adjusted its workforce at WhiteHat Jr, resulting in the layoff of most employees. The remaining staff members have been transitioned to the payrolls of Think & Learn Pvt Ltd, the company behind Byju’s core K-12 business. Byju Raveendran, Co-Founder and CEO of Byju’s, has acknowledged the challenges posed by WhiteHat Jr, particularly in terms of customer acquisition costs. While WhiteHat Jr contributed Rs 326.66 crore to total revenue, it incurred a loss of Rs 1,548.76 crore before tax in FY21.
Byju’s is currently undergoing a strategic review of its subsidiaries and assets as it seeks to conserve cash in light of its commitments to lenders. The company is planning to let go of approximately 5,000 more employees on the payroll of Think & Learn Pvt.
Byju’s has also sent a proposal to its lenders to repay its $1.2 billion term loan B within the next six months, with an upfront payment of $300 million in the next three months. To fund its repayment plans, the company is considering the sale of two key assets, Great Learning and US-based Epic.
In addition to these measures, Byju’s has been exploring a fresh equity funding round. As one of the world’s largest edtech firms, Byju’s has been seeking funds throughout the year but has faced challenges in closing the round due to various domestic and international issues.