Billionaire Byju Raveendran hoped to revolutionize education methodologies in schools and colleges through Byju’s, once symbolized the pinnacle of India”s startup landscape. With its innovative blend of online and offline courses, the company soared to a valuation of $22 billion in 2022. However, in recent times, Byju”s has witnessed a dramatic decline in both popularity and valuation, prompting calls from several investors for a leadership overhaul within the ed-tech giant.
How It Started
Byju Raveendran worked as a service engineer at a shipping firm before he stumbled upon his passion for teaching during a visit to his hometown in Kerala in 2003. His innate knack for helping friends crack the MBA entrance exam CAT led him to ace the test himself with a perfect score. Despite rejecting multiple MBA offers, Raveendran”s exceptional performance in subsequent exams attracted a growing demand for his teaching services, culminating in the formal establishment of Byju”s classes for CAT exam preparation in 2006.
How It Grew
Expanding its horizons to undergraduate students, Byju”s evolved into Think and Learn Pvt Ltd. in 2011, eventually delving into school curriculum by crafting interactive video modules and employing real-life examples to elucidate fundamental concepts. By 2015, the launch of the Byju”s learning app catered to students from kindergarten to class 12, propelling the company to the coveted status of India”s first ed-tech unicorn by 2019.
Byju”s garnered widespread acclaim within India”s startup ecosystem, captivating audiences with its trailblazing educational methodologies. Leveraging interactive videos and cutting-edge technology, coupled with endorsements from renowned figures like Shah Rukh Khan and Virat Kohli, Byju”s soared to an unparalleled valuation of $22 billion, cementing its position as the world”s most valuable ed-tech startup.
What Led To Its Downfall
Following an aggressive expansion phase during the Covid-19 pandemic, the company grappled with cash-flow issues. Then allegations of a toxic work culture and excessive pressure on employees to acquire new customers severely affected Byju”s reputation.
In June 2023, tech investor Prosus slashed Byju”s valuation by 75%, triggering layoffs and accusations of financial mismanagement. Byju”s parent company, Think & Learn Pvt Ltd., faced further scrutiny for failing to remit PF contributions to employees and incurred suspensions from tech giants Google and Facebook for unpaid advertising dues.
Byju”s ambitious marketing blitz during the pandemic, coupled with an aggressive acquisition spree, strained its financial resources. Sponsorships of major sporting events and celebrity endorsements further exacerbated its financial woes, culminating in a default on a $1.2 billion loan in 2021.
The company”s tardiness in financial reporting and the departure of key personnel, including the CFO and CTO, further raised concerns about its operational stability. By November 2023, Byju”s founder had to pledge personal assets to secure a loan for employee salaries, signaling a stark departure from its zenith.
What Next For Byju’s
The latest setback for Byju”s is the shareholders” resolution seeking the ouster of the founders from top leadership positions, including CEO Byju Raveendran. Amid its efforts to raise $200 million through a rights issue of shares, Byju”s acknowledges the criticality of this capital infusion for a successful turnaround. The outcome of this capital-raising endeavor will likely determine the company”s prospects in navigating through this challenging phase.
