It is well-known that Byju’s is a recognized learning platform in the edtech sector that provides online education. The latest educational technology and the unique teaching methodology, including visualizations, interactive simulations, and real-life examples, have successfully engaged students and made learning fun. Due to the financial crisis, the troubled edtech major Byju's is facing growth challenges. Let us assimilate the story of Byju's and its current challenges.
Hailing from a small village named Azhikode in Kerala, Byju Raveendran started his career as an engineer for a shipping company in the United Kingdom. He used to assist his friends and colleagues in preparing for the CAT exam, and Byju himself also took the exam and obtained a good grade. Instead of getting admitted to IIMs, Byju started counseling students in preparation for their mathematics examinations. He started to take free workshops in the beginning. After he became confident about his teaching skills, he started to take the fee. The workshops became popular at one point, and more than 20,000 students attended one of them.
Funding and Investors
Chan-Zuckerberg Initiative, Facebook founder Mark Zuckerberg, and his wife Priscilla Chan's startup funding program provided funds to Byju’s in 2016. The sales of its online educational coaching programs skyrocketed, and Byju soon became a unicorn and was placed in the prestigious unicorn club of Indian startups.
The company completed a funding round of $ 800 million in 2022. The funding round included the investors Sumeru Ventures, Vitruvian Partners, and BlackRock, with $400 million in funds. Besides, as Sumeru and Oxshott didn’t contribute the funds of $250 million, the company started facing financial challenges.
Raveendran holds approximately 25 percent of the company's stakes, and Divya Gokulnath and the management team hold about a percent. The company got funds of $16.5 billion in 2021 in a funding round, striking Paytm as the most valued startup in India. Subsequently, the valuation was increased to $22 billion in July 2022 after the successful funding round. Besides, in May 2023, BlackRock cut Byju's valuation by 62 percent, which resulted in a new valuation of $8.4 billion.
Growth and Revenue
Byju gained the top five tech positions in the Ed marketplace very soon after it entered with vigorous advertising strategies. Byju’s has witnessed the Indian market and has established a footprint in the Middle East as well. The company planned to spread its wings towards the United States, the United Kingdom, South Africa, and other global markets. To create its trail in the USA, Byju’s took a stake in the US-based learning app Osmo in January 2019. The company also joined hands with Disney to launch an early learning app for classes 1-3.
The company was also in the news as it took positive measures towards the coronavirus crisis. As educational institutes from different parts of the country have shut down due to the pandemic, it made a learning app that was free for students until April 2020 to provide a seamless learning experience to students.
Byju Owes Money to BCCI
The company reportedly is in debt of about Rs 86.21 crore in dues to the Board of Control for Cricket in India (BCCI), as it has been the jersey sponsor for the Indian cricket team. But the founders are not accepting the allegation and also say that the cricketing board of India has also rejected such news.
The company got the sponsorship rights from the smartphone brand OPPO, and the last deal of the edtech major with BCCI expired in March 2022. Moreover, with the common agreement, both extended the partnership till April 2022, which will continue till the 2023 ODI World Cup, and the latest deal was worth $55 million.
Byju's Under Government Scanner for Misselling Courses
The Department of Consumer Affairs finds Byju’s as one of the edtech companies that missell courses. The numerous complaints against three companies, including Byju’s and its subsidiaries, were brought to the attention of the India Edtech Consortium (IEC) in 2022. The once most valued Indian startup has also been asked to work with the Advertising Standards Council of India (ASCI) to verify the claims that it makes in its ads.
We hear every day about the layoffs in the large tech companies. Byju’s fired about 600 workers from its marketing and content departments in October 2023. Under the supervision of Arjun Mohan, the new CEO, the company is currently undergoing restructuring, which includes layoffs.
Recently, amid the financial crisis, Byju's founder and CEO, Byju Raveendran, issued a letter to the team members on making payroll. As the edtech is issued with lawsuits from the lenders, the employees have not received their salaries, and the firm is seeking $200 million by selling new stock to shareholders at a valuation of just $ 250 million. Byju’s saw its peak when the valuation hit $22 billion in 2022 and a steep downfall in the following year.
Many key leaders of the company are resigning due to the financial crisis triggered by the Enforcement Directorate (ED) conducting multiple raids across Byju's office premises, alleging multiple violations of the Foreign Exchange Management Act (FEMA).