Byju’s board currently has three members, Byju Raveendran, his wife and co-founder Divya Gokulnath and his brother Riju Raveendran (File photo: Bloomberg)
Byju’s, once India’s most successful edtech startup, is in financial trouble. Its US unit has filed for bankruptcy proceedings. Byju’s is struggling to pay its employees and is using layoffs to cut its costs.
But how did Byju’s, with its highest valuation of $22 billion, once have lost its glory? Explained:
What is the problem with Byju?
Byju’s valuation has fallen by nearly 10% from its all-time high of $22 billion.
The company is also facing pushback from its investors who want changes in the managerial structure and even removed company founder Byju Raveendran as chief executive officer (CEO).
In November 2023, a court in Delaware, US upheld the lender’s right to acquire Byju’s US unit Alpha Inc after it failed to make interest payments multiple times. Recently Alpha Inc. has filed for bankruptcy proceedings and stated that it is unable to pay its debts.
India’s financial crimes unit, the Enforcement Directorate (ED), has issued notices to Byju’s parent firm Think & Learn and Byju’s over alleged forex violations of Rs 9,362.35 crore.
What is the reason for the downfall of Byju?
The problems started in 2022 when regular classes started after being disrupted during the pandemic. Byju’s had expanded rapidly during Covid-19.
Mass layoffs at Byju’s
byju’s It laid off 1,000 employees, or 15% of its total strength, from its engineering unit in February 2023.
In February 2024, after paying salaries to the employees till the month of January, Raveendran wrote a letter to the company’s employees informing them that the company was in a difficult financial situation.
“I have been moving mountains for months for parole and this time, the struggle was even greater to ensure that you get what you deserve,” Raveendran said in the letter.
Who are the biggest investors in Byju’s?
According to Tracxn, the edtech firm had raised a total of $5.08 billion in funding as of May 12, 2023.
In 2013, Byju’s got its first investors in Series A funding by Ranjan Pai and Mohandas Pai.
Later, it raised funding from Sequoia Capital, Innoven Capital, Sofina Group, Times Internet and International Finance Corporation.
When Byju’s raised funding from Verlinvest in 2017, it made Shahrukh Khan its brand ambassador.
Investments and acquisitions by BYJU’S
According to its website it has acquired the following entities:
July 2021: Great Learning Pvt. Ltd.
July 2021: epic!
April 2021: Aakash Educational Services Limited
July 2020: whitehat junior
January 2019: Osmo
July 2017: TutorVista, Edurite from Pearson
WhiteHat Jr. contributed majorly to Byju’s losses. It was also reported that the company is considering closing it down
WhiteHat Jr.’s operations but Byju’s later denied the claims.
Aakash Educational Services Ltd proved to be a good value investment for Byju’s as it reported 82% growth in its profit in March 2022.
Who is the owner of Byju?
According to an ET report, Byju Raveendran and his family hold about 26% stake in the company. Apart from this, Prosus, Peak XV Partners and General Atlantic hold 9.10%, 7% and 6% stake respectively.
Who are the board members of BYJU’S?
Byju’s board currently has three members, Byju Raveendran, his wife and co-founder Divya Gokulnath and his brother Riju Raveendran.
“In June 2023, representatives of its major investors Prosus, Peak XV Partners and Chan Zuckerberg Initiative resigned from the board due to differences with the founders,” CNBC-TV18 reported.
Who is Byju Raveendran?
Byju Raveendran is the Group CEO of the company, however, recently some investors have called for an extraordinary general meeting (EGM) to replace him, in which the company has said that the investors do not have the right to vote in the matter. Election of CEO or any other change in management.
In October 2023, Raveendran’s alumnus Arjun Mohan was appointed as the India CEO of Byju’s and replaced Mrinal Mohit, who was one of the founding members of the company.
Byju Raveendran founded Think & Learn in 2011 which offered online lessons and Byju’s app was launched in 2015.
He is the son of a teacher and hails from Azhikode village in Kannur district of Kerala.
What is EdTech Industry?
EdTech is education plus technology which essentially means the use of technology to facilitate learning. India is one of the biggest markets for the edtech industry due to its large population.
The edtech industry got a boost during the Covid outbreak in India when physical classes were closed and online education took its place.
This was the time when Byju’s business, along with other edtech firms, was flourishing.
BYJU’s competitors in the Indian edtech industry
Unacademy: It majorly focuses on various competitive exams. It was founded in 2015 by Gaurav Munjal, Hemesh Singh and Roman Saini.
Vedantu: It is a major competitor of Byju’s as both the companies have similar user groups i.e. from class 4 to class 12.
Byju and Indian cricket team
In 2019, Byju’s replaced Oppo as the main sponsor of the Indian cricket team.
BCCI has also accused Byju’s of defaulting in payments and has filed a case in the National Company Law Tribunal.
A decision is yet to be taken on this matter.
first published: February 12 2024 | 5:38 pm Is
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