Even by the standards of India’s febrile start-up scene, the rise and fall of Byju’s, an educational technology or “edtech” company, has been startling. Founded by “charismatic former maths teacher” Byju Raveendran, the firm sold tutoring services to millions of parents seeking to prepare their children for the country’s “brutally competitive school entrance exams”, says the Financial Times. Credited with reshaping the landscape of online education, it attracted big-name backers such as Mark Zuckerberg, BlackRock and Dutch tech investor Prosus – becoming India’s most valuable start-up in 2022, worth an estimated $22 billion. Two years on, both the firm and its founder’s reputation are in tatters, and creditors are scrambling to claw back cash.
Byju's impact on education in India
It looks like an uphill struggle. Byju’s, which expanded aggressively into the US, faces “legal battles from Delaware to Bengaluru” with litigants ranging from the Qatar Investment Authority to India’s national cricket authority, which is pushing to have Byju’s declared insolvent in hopes of recovering “sponsorship dues”. Raveendran, 44, has skipped the country – along with his wife and co-founder Divya Gokulnath, and brother Riju. Reportedly, they are all living together in Dubai’s “affluent” Emirates Hills.
In a somewhat farcical exchange with a US judge earlier this year, Riju, the sole director of US-based Byju’s Alpha (a company set up to receive loans), was tasked with explaining the whereabouts of some $533 million. “I really don’t know,” he replied, assuring the judge “he had sent emails” to his housemates asking the same question. Unsurprisingly, says the Indian online news channel Wion, big questions are being asked about corporate governance and management practices. Auditor Deloitte pulled out in 2022 citing “delayed financial statement submissions”.
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In 2007, Raveendran and his wife founded a company that eventually became Think and Learn, says the FT. Word of his innovative methods – and the results he was getting – quickly spread. Within a couple of years, Raveendran was travelling to “nine cities a week” across India, taking maths classes in “packed stadiums”. Ultimately, they decided that the only way to manage demand was to go digital and, in 2015, launched the main Byju’s app. The couple offered smartphone- or tablet-based learning to students from primary school age upwards, proclaiming they were “on a journey to revolutionise education in India” – a message that resonated with major investors, including the Chan Zuckerberg Initiative and Sequoia Capital, whose arrival transformed Byju’s into a billion-dollar start-up. The pandemic lockdowns put growth on steroids – and Byju’s expanded rapidly via mergers and acquisitions internationally. When interest rates started to rise and “the cheap money dried up, the value of the company plunged and investors were forced to write off stakes worth hundreds of millions of dollars”.
The paperchase continues
Holed up in his luxury base in Dubai, Raveendran denies any allegation of fraud, says Business Times (India) – and, indeed, blames his backers for Byju’s meltdown. “Investors didn’t care about students or parents, they just wanted me to create a $100 billion company,” he lamented on a recent call with journalists, claiming they ran away at the first sign of trouble. He has also launched a countersuit against his US lenders, accusing them of unfairly accelerating loan terms and negotiating in “bad faith”. “I have felt like a man screaming into a hurricane of hurdles,” wrote Raveendran in a memo to Byju’s remaining (unpaid) staff in August. Meanwhile, the money paper chase continues.
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