Byju’s: Unraveling What Led to Its Downfall After Reaching a Valuation of ₹1.6 Lakh Crores

Byju’s, led by billionaire CEO Byju Raveendran, emerged as a symbol of India’s startup landscape, promising to revolutionize education at schools and colleges. Its valuation soared to $22 billion in 2022 as it gained popularity with online and offline education offerings. However, over the past year, the company has faced a significant decline in both its popularity and valuation, prompting some investors to call for leadership changes at the ed-tech firm.

Byju Raveendran, originally a service engineer at a shipping company, discovered his passion for teaching during a visit to his hometown in Kerala in 2003. His success in helping friends crack the MBA entrance exam CAT led to demand for his teaching services, eventually leading to the establishment of Byju’s classes for CAT preparation in 2006.

The company’s rapid ascent continued with its expansion into undergraduate and school curriculum segments, culminating in the launch of the Byju’s learning app in 2015. By 2019, Byju’s had become India’s first ed-tech unicorn, valued at over $1 billion, garnering attention for its innovative educational approach and celebrity endorsements from figures like Shah Rukh Khan and Virat Kohli.

However, Byju’s meteoric rise was followed by a turbulent descent. Despite expanding aggressively during the Covid-19 pandemic and acquiring several ed-tech startups globally, the company faced cash-flow challenges and a contentious dispute over a $1.2 billion loan.

Allegations of a toxic work environment and excessive pressure on employees to acquire customers also surfaced, further tarnishing Byju’s reputation. In June 2023, tech investor Prosus slashed Byju’s valuation by 75%, triggering layoffs and accusations of financial mismanagement. The parent company, Think & Learn Pvt Ltd., faced additional scrutiny for non-payment of employee PF contributions and advertising dues owed to Google and Facebook.

Financially, Byju’s saw revenue growth but suffered substantial losses, with its financial instability exacerbated by delayed financial reporting and executive departures. By November 2023, founder Byju Raveendran had to mortgage personal properties to secure funds for employee salaries, marking a stark contrast from its peak valuation of $22 billion.

Currently, Byju’s is navigating shareholder resolutions seeking leadership changes, including calls for CEO Byju Raveendran’s removal. With ongoing efforts to raise $200 million through a rights issue, Byju’s aims to stabilize and potentially reverse its fortunes. The outcome of this capital-raising initiative will likely determine the company’s ability to orchestrate a successful turnaround in the competitive landscape of India’s ed-tech sector.