New Delhi, India – Byju’s, the once highly acclaimed startup in India’s educational technology sector, is now facing a significant downfall after experiencing a rapid rise in popularity and valuation. Led by billionaire CEO Byju Raveendran, the company was lauded for its unique approach to online and offline education courses, reaching an astonishing valuation of $22 billion in 2022. However, in recent times, the company’s success has taken a sharp decline, prompting investors to call for a change in leadership.
Byju Raveendran, the founder of Byju’s, initially discovered his passion for teaching after assisting friends in cracking the MBA entrance exam CAT during a visit to his hometown in Kerala in 2003. This realization led to the establishment of Byju’s classes for the CAT exam in 2006, followed by the expansion into undergraduate education and eventually the school curriculum, creating interactive videos and using real-life examples to make fundamental concepts more easily accessible to students.
The company’s meteoric rise culminated in the launch of the Byju’s learning app in 2015, offering educational resources for students from kindergarten to 12th grade. By 2019, Byju’s emerged as India’s first ed-tech unicorn, valued at over $1 billion and gaining widespread attention for its innovative approach to education.
However, the tide turned for Byju’s as rapid expansion during the Covid-19 pandemic led to challenges related to cash flow and a dispute with creditors over a $1.2 billion loan. Allegations of a toxic work culture and pressure on employees, coupled with financial mismanagement, inflicted further damage on the company’s reputation and stability.
The company’s revenue remained steady, but losses skyrocketed from Rs 252 crore to 4,564 crore in the span of just one year between 2019-20 and 2020-21. Aggressive marketing tactics, sponsorships, and celebrity endorsements strained its financial standing. Additionally, the failure to file timely financial reports raised questions about its stability, prompting resignations from key members of the management team.
As of November 2023, Byju’s founder had to mortgage personal properties to secure loans for employee salaries, marking a drastic decline in valuation. Shareholders have moved to oust the founders from top leadership roles, including CEO Byju Raveendran, as the company seeks to raise $200 million through a rights issue of shares to facilitate a successful turnaround.
The future of Byju’s now hinges on the success of its ongoing capital-raising efforts, as the company grapples with the chain of events that has led to its troubling period after once thriving as a prominent figure in the ed-tech industry.