Mumbai: Byju Raveendran, who shot to fame after founding the ed-tech firm Byju’s, has recently had a steep fall from grace as the firm — once ranked as India’s most valuable start-up — has been facing a barrage of challenges.
Helped by the Covid-19 pandemic boom, Byju’s was valued at $22 billion in 2022, making it India’s most valuable start-up that year. But the pandemic did not only bring the boom for the company, it also brought with it an increase in interest rates being charged by central banks, and hence also contributed to the fall of Byju’s. After the pandemic, central banks increased interest rates significantly and, suddenly, the value of Byju’s fell sharply.
Currently, the edtech firm is valued at $120 million as against $22 billion two years ago. Additionally, Byju is also fighting legal battles with lenders in the US over a $1.2 billion loan. It all started in 2006 with Raveendran, a former maths teacher, formally launching classes for CAT exam preparation, targeting MBA aspirants. Over time, the ed-tech company expanded to serve both undergraduate and (UG) and school students.
In 2015, the Byju’s app made its debut and within four years, the firm became India’s first edtech unicorn. In 2019, when the pandemic hit the world and schools transitioned to online learning, Byju’s emerged as the biggest winner as it was already offering online tutoring. After securing investments from global private equity and venture capital firms and billionaire Mark Zuckerberg, Raveendran went on a global expansion spree and acquired several top ed-tech firms, including TutorVista, Edurite, Osmo, Epic!, and WhiteHat Jr. The company also bought stakes in Aakash Institute, a renowned coaching chain in India.
Raveendran had to shed nearly $1 billion for these acquisitions and stakes, resulting in investor money being fully utilised. At the same time, Byju’s started investing in high-profile sponsorships. The brand became the official sponsor of FIFA World Cup 2022 in Qatar and also signed a deal with Qatar’s cricket team. The company signed a sponsorship deal with the Board of Control for Cricket in India (BCCI).
Byju’s also signed global football icon Lionel Messi, Olympic Neeraj Chopra, and PV Sindhu as brand ambassadors of the company. Raveendran took loans worth $1.2 billion from a couple of American banks. The transaction began positively but took a downturn when the primary lenders sold portions of it on the secondary market, leading to a fragmented lender group with multiple entities involved. This triggered litigation in US courts against Raveendran., with the consortium of lenders and their trustee seeking control of Alpha Inc, the company’s Delaware-based subsidiary
