BYJU’S, an Indian edtech major that has been on the Indian cricket team’s jersey since 2019, wants to exit the agreement after March 2023 and will terminate its contract with the Board of Control for Cricket in India (BCCI). According to a report, the current development indicates that BYJU’S is looking to comprehend its media spending.
According to reports, BCCI has confirmed the development. “Yes, they have written to us they want to exit jersey sponsorship. The matter will be discussed at an apex council meeting. They need to comply with all contractual obligations and exit can be taken,” the report stated by a senior official.
The enormous edtech entity has been going through significant financial difficulties. Among other things, soaring losses forced the startup to optimise its finances.
The company also unveiled plans to lay off 5% of its workforce (nearly 2500 employees) and close branches and facilities in approximately 60 Indian cities.
Following the layoffs, the company was chastised for its marketing and promotional expenditures, which included signing celebrities for brand endorsements (the most recent being Lionel Messi) and sponsorship deals with the BCCI and the FIFA World Cup Qatar 2022. Critics claim that the funding crisis has only impacted BYJU’s employees, while the unicorn continues to spend heavily on branding campaigns.
In addition, BYJU’S is also an official sponsor of International Cricket Council (ICC) events.
However, the Bengaluru-based edtech firm is not alone. Plenty of renowned edtech startups, including Unacademy and Vedantu, have also spent money on branding through cricket properties in recent years.
The growing losses have put BYJU’S under intense scrutiny. The startup led by Byju Raveendran saw its losses more than double to INR 4,588 Cr in FY21, up from INR 231.69 Cr in FY20.
In FY21, its operating revenue was INR 2,428.3 Cr, a 3.3% decrease from INR 2,511 Cr the previous year. Its advertisements and marketing expenses had increased 150% from INR 899 Cr in FY20 to INR 2,251 Cr.
Total expenses increased 1.5X to INR 7,027.4 Cr in FY21, from INR 2,873 Cr in FY20.
BYJU’S paid approximately $40 million for the FIFA deal and $55 million to extend its BCCI jersey bargain, according to unofficial reports.