Byju Raveendran, Co-founder and CEO of ed-tech giant Byju, has recently announced to launch a new ed-tech venture.
Raveendran said that this new venture will operate at almost ‘half the cost’ of his current grappling company, byju.
He said, he is dedicated finding new ways to teach even if it means closing down the parent company (think and learn).
Raveendran is very optimistic about the future and has said, “I will make a comeback“. He believes that Byju will rebound in a different avatar soon.
Failure of Byju
Founded by Byju Raveendran in 2011, Byju was one of the fastest growing online educational platform. Byju’s became very popular, attracting millions of users around the world, getting a lot of investment, and expanding to other countries.
Byju also gained attention for it’s celebrity endorsement from Shahrukh khan for it’s promotion.
By 2020, the company boasted a remarkable valuation of $22 billion, securing its position as the ‘most valuable ed-tech enterprise in the world’.
Despite this huge success and growth, Byju started facing many financial, legal and internal issues the company’s value dropped below $1 billion as investors became dissatisfied with regulations. There were also layoffs, resignations, and low morale among employees, showing that the company was struggling from internal mismanagement.
The company heavily relied on loans from various sources, including banks, private equity firms, and venture capitalists. However, it struggled to generate sufficient cash flow to meet its debt obligations. The failure to repay a $300 million loan from Redwood Global Investments and breaching conditions on a $500 million loan in 2022 resulted in severe financial strain, legal troubles, and a loss of confidence from investors.
Byju’s top investors, including Sofina, Peak XV, Prosus, and General Atlantic, are seeking to remove Raveendran from his position due to allegations of mismanagement.
Raveendran told that his investors weren’t very supportive when things got tough at Byju’s. He mentioned that they were all in during the good times but disappeared when problems arose.
He also mentioned that he and other co-founders plan to stick around in the education technology industry. Raveendran highlighted that the only ones investing money in the company now are the founders themselves and all other investors have backed off. “Investors didn’t care about students or parents, they just wanted me to create a $100-billion company” Said Raveendran.
Byju is facing multiple litigations from lenders and investors. The value of parent company Think & Learn is down to zero but 26 subsidiaries of Byju’s cumulatively report Rs 5,500 crore in ARR (annual recurring revenue) even now, CEO Raveendran claimed. At its peak in 2021, Byju’s claimed to make Rs 10,000 crore in revenues. The core business right now is down to zero.
What we learn from Byju failure
- Sustainable business model: While thriving for a big brand, one should always priorities a sustainable business model.
- Ethical business practices: Practice transparency and ethical behavior in all business dealings, fostering trust with investors, employees, and customers.
- Focus on Quality content: Provide a top notch content to the customer rather than investing a huge amount in sponsorship and promotion.
- Debt and internal management: Utilize financial means in the best manner and focus on internal management between employees.
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