BYJU’S In 2024: How The $22 Bn Company Crumbled

BYJU’S In 2024: How The $22 Bn Company Crumbled

SUMMARY

Byju Raveendran has not stepped back into India since leaving it at the end of 2023, much before BYJU’S came crumbling down after a series of catastrophes ranging from investor spats to unpaid creditors

If indeed the company goes under water as seems likely, one would expect CEO Byju Raveendran to stand up and take accountability for this disaster. Instead, he has resorted to attacking investors even in these bleak times

And despite the BYJU’S CEO’s optimism around a comeback for the edtech giant, his claims have found few takers. And now the biggest question after a gruesome 2024 is will Byju Raveendran ever return to India?

February 22, 2024 — Headlines around India revealed an Enforcement Directorate lookout circular against BYJU’S founder and CEO Byju Raveendran. “Raveendran always had UAE as his second home. Besides, he kept shuttling between India, US for the past few years. But no one had spotted him in Bengaluru as well where the company’s lavish headquarters were,” a former senior manager at BYJU’S told Inc42. “These clutch of  investors who together had lower stake in BYJU’S than the founders alleged that Raveendran has not been transparent in his dealings and management of the company. However, the cracks in the company were already evident when it was without a CFO from 2021 to 2023. And there were repeated delays in submitting annual reports. One can say there was complacency on the part of investors in putting these systems in place,” said a partner at a VC firm that had invested in BYJU’S. Despite these overtures and the company’s efforts to get leaner — after layoffs and scaling down — BYJU’S was in a Catch 22 situation. “We were assured of our salaries by our senior managers, but little did we know that they were actually asking the last 5,000 employees to leave. The company had almost shut 80% of its operations by August,” said a former senior manager at operations who left the company in August. “Raveendran on his part kept organising select press conferences, wrote emailed communications to employees to demonstrate that he will not concede defeat. But the odds were stacked against him,” Sriram Subramanian, founder and MD, InGovern Research told us.This process as per Insolvency and Bankruptcy Code (IBC) of India allows the committee of creditors 330 days to find a buyer for the company. In case the CoC is unable to find a suitable buyer, the creditors are allowed to liquidate the company assets. “The liquidation process being seen over by NCLT can also involve settlement of corporate debts. In this case the corpus of debt is huge and the promoters have been unable to negotiate settlement in earlier talks. It also looks unlikely that they are able to find a buyer of the company since it is an asset-light business model and the demand for edtech products remains low. Furthermore, the company’s reputation has suffered a serious dent which also impacts any chances of the business revival,” he added.“When you have several governments probing your business models, the ED after you, foreign and domestic creditors who feel cheated, it is not only unethical but also unrealistic for him to return. I don’t know how he is asserting this with full confidence,” a VC fund manager who was a former partner at a Big Four told us.

After months of turmoil at BYJU’s — starting in June 2023 — the spotlight was again on Raveendran, but an entirely different kind of spotlight. 

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