Byju Raveendran, the Indian mathematics whiz who transformed from a teacher to a startup billionaire, is now facing the most significant test of his career. His once high-flying education-technology company, Byju’s, has plummeted in valuation from $22 billion to below $2 billion and is now embroiled in an insolvency process.
The future of Byju’s, India’s largest startup, rests with the nation’s courts after a tribunal initiated an insolvency process last week. This move resulted in Raveendran losing control of the company he founded. The 44-year-old, hailing from a family of teachers in a small South Indian village, now faces allegations of “financial mismanagement and compliance issues.”
Byju’s was unable to pay $19 million in sponsorship dues to India’s cricket federation, leading the tribunal to suspend the company’s board and appoint a court-appointed restructuring expert to oversee operations. An appeals tribunal is scheduled to hear whether the insolvency process should be quashed, following Raveendran’s argument that his company is solvent. He claims that insolvency could lead to the shutdown of Byju’s and the loss of 27,000 jobs, including those of teachers. This outcome would also negatively impact Byju’s investors, including Dutch technology investor Prosus.
Raveendran denies any wrongdoing or mismanagement at his firm, which has recently been entangled in lawsuits over unpaid loans and public boardroom disputes with foreign investors. This potential insolvency represents a dramatic turn for an entrepreneur known for his passion and goal-oriented approach, though some describe his crisis management as abrasive.
“He said things are improving, don’t worry, we have the money,” commented a former senior vice president who quit last year. Another executive who worked closely with Raveendran described him as presenting a “suave, nice and polished” image but ultimately having a “trust deficit.”
Byju’s spokesperson and Raveendran have not responded to requests for comment.
Byju’s Downfall: ‘Our Fair Share of Mistakes’
Raveendran, an engineer by training, started Byju’s in 2011 with physical classes, following encouragement from friends to pursue teaching. Known for his exceptional performance in a premier Indian management exam, he built Byju’s into an educational empire alongside his wife, Divya Gokulnath, a former student of his.
Byju’s capitalized on India’s education-focused culture, offering online teaching programs priced between $100 and $300. The company experienced explosive growth during the COVID-19 pandemic, when students shifted to online learning. At its peak in 2021, Raveendran and Gokulnath had a combined net worth of $4 billion, according to Forbes.
However, Byju’s rapid expansion involved expensive acquisitions and aggressive marketing tactics, which eventually damaged its reputation. Despite backing from prominent investors like General Atlantic, Prosus, and Mark Zuckerberg’s philanthropy venture, the company’s fortunes declined.
“While growing fast, as I’ve accepted multiple times, we’ve made our fair share of mistakes,” Raveendran admitted in an interview at the World Economic Forum in Davos last year. He also mentioned that laying off some of Byju’s then-50,000 employees and reducing branding expenses were necessary to strengthen the loss-making company and achieve positive cash flow.
“Every country needs a Byju’s,” Raveendran asserted.
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