01 March 2024 – Byju’s, a leading edtech startup in India, has faced a tumultuous period marked by a steep decline in its valuation, shedding 95% of its worth from the highs of 2022. The company once hailed as a unicorn, now confronts a litany of challenges, including alleged financial irregularities and a significant shakeup in its leadership.
Byju’s Founding Story:
Founded in 2011 by Byju Raveendran, a teacher and engineer, Think and Learn Private Limited, the parent company of Byju’s, aimed to revolutionize education. Born into a family of educators in southern India, Raveendran’s venture gained prominence with the launch of Byju’s – The Learning App in 2015, offering interactive educational content.
Byju experienced exponential growth during the COVID-19 pandemic when the demand for online learning soared. The company, boasting over 100 million monthly students, attracted global investors and achieved a valuation of $22 billion in 2022. Its success was fueled by strategic acquisitions, including Aakash Educational Services, Epic, Osmo, and WhiteHat Jr.
Challenges and Setbacks for Byju’s:
The end of pandemic restrictions led to a slowdown in online learning, prompting Byju’s to cut over 1,000 jobs in June 2023. Governance issues surfaced, leading to the resignation of its auditor Deloitte, and key board members. The filing of delayed financials in November 2023 revealed operating losses of $290 million for its core online education business.
In a significant turn of events, major shareholders, including global investment group Prosus, voted to remove founder Byju Raveendran as CEO in an extraordinary general meeting. Byju’s rejected the resolutions, claiming the meeting was invalid and ineffective due to a low turnout.
Byju’s has reportedly struggled to repay a $1.2 billion loan, faces challenges with staff salaries, and its U.S. unit, Alpha, filed for Chapter 11 bankruptcy. The company announced a $200 million rights issue of shares in January to address immediate liabilities and operational costs.
Conclusion:
Byju’s, once the poster child of India’s edtech revolution, finds itself grappling with a myriad of challenges that have led to a drastic erosion of its valuation. Governance issues, financial setbacks, and leadership changes have cast a shadow over the company’s future. As it strives to navigate these turbulent waters, the edtech giant faces the daunting task of rebuilding trust, addressing financial woes, and redefining its trajectory in the competitive edtech landscape. The evolution of Byju’s from a high-flying unicorn to its current predicament serves as a cautionary tale in the dynamic and evolving startup ecosystem.
