Byju’s, once India’s most valuable start-up and first “unicorn” in the education technology sector, is now facing insolvency proceedings. The company, which was valued at $22bn less than two years ago, is fighting for its life as a number of shareholders have written down the value of their stake in the business to almost zero.
The origins of Byju’s can be traced back to 2006 when engineer Byju Raveendran began informal maths classes for his friends working in Bangalore’s tech sector. As demand grew, he began teaching hundreds of people at a time and expanded the service to other major Indian cities. In 2011, he launched Think & Learn Private Limited with his teacher wife Divya Gokulnath, offering tutoring to prepare students for exams. By 2015, the company shifted its focus to online tutoring with a mission to “make learning fun”.
Byju’s was in the right place at the right time when smartphone adoption took off in India, leading to a surge in demand for its educational apps. The company later diversified into selling laptops and tablets with pre-loaded software. It caught the attention of venture capital firms such as Lightspeed and The Chan Zuckerberg Initiative, who joined in funding rounds along with other global investors. Byju’s was also successful in securing high-profile sponsorships, including a shirt sponsorship deal with India’s cricket teams and a brand ambassadorship with Argentinian football star Lionel Messi.
However, as the world emerged from lockdown and demand for online education services began to decline, investors started questioning the company’s profitability and high-pressure sales techniques. Complaints about mis-selling and accounting discrepancies also surfaced, leading to office closures and layoffs. In May 2021, Byju’s raised emergency funding to repay a loan and the following month, its auditor and several directors resigned.
In February 2022, shareholders voted to remove Byju Raveendran as CEO, and a month later, the company’s US subsidiary filed for bankruptcy protection. The latest blow came from the National Company Law Tribunal, which accepted a request from the Board of Control for Cricket in India to begin insolvency proceedings over unpaid dues. This puts Byju’s creditors in control and raises questions about the company’s future.
Mr. Raveendran is currently in Dubai and reportedly faces arrest if he returns to India. It seems that the downfall of Byju’s, once a shining success story, has come to an end.
