Rise and fall of Byju Raveedran’s $22-billion edtech empire to less than $ 2-bn valuation; ED issues lookout notice

HYDERABAD: A poster boy of the booming edtech sector in India has finally met his nemesis. The Directorate of Enforcement (ED) issued a lookout notice against Byju Raveendran marking an ending to a glorious path-blazer Byju’s valued at $22 billion in July 2022, but fell to less than $ 2 billion by January 13.

Byju’s success and its failure were fast and phenomenal. Millions of students across different countries use Byju’s content or its app for success in examinations, particularly in STEM subjects. Many rank-holders secured admissions to top-notch institutions with the help of Byju’s quick learning techniques.

Andhra Pradesh Government on June 17,2022 signed an MoU with Byju’s to impart quality education in Government schools in the State. The pact was for the content provided by the Byju’s for IV to X standard students.

The journey of Byju’s started in 2011, when Raveendran, a passionate teacher, quickly grabbed the attention of millions of parents who wanted their children to learn complex concepts in a simple manner, making education fun rather than a drag on the young minds. He launched the app along with Divya Gokulnath and expanded its operations to 120 countries. After shifting to Bengaluru and launching the app in 2015, Raveendran never looked back.

Game Changer

The game-changer app used interactive and colourful personalised learning journeys, making learning enjoyable, along with strong video content. Global investors and funding agencies stood in line to invest in the Byju’s and enjoy a share of its seamless expansion. It has covered from class 1 to 12, then competitive examinations in domestic and international markets. The expansion included personalised, multilingual tuition for interested students at its swanky offices built under its overambitious expansion plan. Byju’s made 17 acquisitions, mostly complementary educational platforms, such as Aakash Educataional Services, Osmo in 2019 and WhiteHat Jr in 2020.

Byju’s raised $5.08 billion spanning 28 rounds. While the first round of funding was on March 30, 2013, the last fund it had raised was on May 12, 2023 ($ 250 million).

The downfall

The downfall of Byju’s could be attributed to multiple reasons. Industry observers said that the downtrend started after Raveendran entered into the sale of hardware such as Tablets and SD cards preloaded with content. Maybe at this juncture, he lost track of the real essence of his business, the education, Byju’s core competence.

Debts piled on he for the first time failed to repay a loan of $300 million he took from a Singapore-based funder. Alerted by the red flag, other investors too started pestering him for a quick repayment of their loans. Internally, there were problems and its auditor, Deloitte, also quit and three board members followed suit in 2023.

Byju’s aggressive marketing, which gave the company an edge over others, also became a main reason for its failure. Parents were fed up with the relentless pushing of costly content resulted in more withdrawals. After a drastic devaluation of the company by January 2024, Byju's also found itself entangled in several financial irregularities and legal issues.

While the rise and fall of Byju’s tells us that one must stick to their core competence, rapid expansion could only be successful if done ethically. There is still hope for the tech company, as it has its content close to its heart. The software and hardware of Byju’s run into millions of dollars and could revive, it if it sticks to its core competence.

But, the long arm of the law is cathching up with Raveendran fast.