Thread by @rajeshkmoorthy

This is slowly becoming like a bubble. It will break once #Byju goes public in India. This company is trying to grow in an inorganic manner. Its revenue was ₹20.16 crores in FY19. For a company that's valued in $Billions, the revenue is just a trickle.

https://twitter.com/BiIndia/status/1417805245946601476

#Byju claims that they have added 13.5 million customers but they have not provided the split of paid accounts vs free accounts. As per Fintrackr, its total expenses had grown 2.6X from Rs 537.4 crore in FY18 to Rs 1,376.5 crore in FY19.

#Byjus advertising and promotion accounted for about 1/3rd of its expenses. They have not provided any expenses/revenue details on their paid courses. Any guesses as to where their primary revenue comes from ??

It's from the sale of Tablets and course materials.

Usually, what these so-called unicorns does is that they inflate their values exponentially by these kinds of gimmicky strategies and pose as if the company is growing. This will help in raising the expectation and so the prices when they go public (IPOs)

Once IPO comes, all of the angel investors/venture capitalists offload their shares and transfer the risks to the public. They go smiling to their banks with almost 200%-500% returns. Then market speculators take over. This has been a vicious cycle.

The same thing is happening in #Zomato as well. Looks like the IPO will open at a high and when the expectations die down, no one will look at it thereafter.

So, whenever you are analyzing a company, look for the hidden things. It's like magic. Unicorns apply misdirection and the actual trick happens elsewhere and what's the result? You losing your money. So be careful on investments. Research twice / thrice before you invest. 🙏🙏🙏