“I saw my father breaking down” and it “made me feel a sudden pain,” Byju Raveendran wrote in a letter to Byju’s employees. Once called India’s ed-tech behemoth, as it earned the title of India’s most-valued startup; Byju’s today is reeling under heavy setbacks, including a liquidity crunch, accounting irregularities, scrutiny from government bodies, alleged mis-selling of courses and mass layoffs, among others.
And now, the company’s key shareholders want Byju Raveendran and his family out of the board. A group of shareholders, who collectively hold 30 per cent shares in Byju’s, are calling for an extraordinary general meeting (EGM) to reconstitute the board of directors, so that it is no longer controlled by the founders of Byju’s parent company, Think & Learn (T&L), Economic Times reported.
For Byju Raveendran, life seems to have come full circle; from being Byju’s biggest, brightest hero to being its most-despised villain.
Byju Raveendran: The path to success
Byju Raveendran’s journey began in his hometown in Kerala, India. Growing up in a family of educators, he developed a passion for learning early on. Despite not receiving formal coaching, Byju excelled academically and cleared the Common Admission Test (CAT) for the prestigious Indian Institutes of Management (IIMs).
While working as an engineer, Byju started teaching a few friends to crack the CAT exam. He devised his teaching methods, emphasising the simplification of complex concepts through visualisation and real-life examples. This experimental teaching approach garnered significant attention and appreciation from students.
In 2011, Byju founded Byju’s, initially as an offline coaching centre in Bengaluru. However, recognising the potential of technology to revolutionise education, he shifted focus to online learning. This decision marked a turning point in his entrepreneurial journey.
Byju’s introduced its learning app in August 2015, which quickly gained popularity for its innovative approach to education.
As the demand for online education surged, Byju’s expanded its offerings, covering a wide range of subjects and competitive exams. Byju Raveendran’s relentless pursuit of excellence, coupled with his ability to adapt to changing market dynamics, propelled the company’s growth.
The company soon became one of the world’s most valuable ed-tech companies, reaching millions of students across India and beyond. At its peak, Byju’s total valuation crossed the $22 billion mark, with its growth backed by major venture capitalists around the world.
The downfall: When parents ran afoul of Byju’s
Following the phenomenon rise of the company in the years of the COVID-19 pandemic, several troubling media reports started surfacing in India showing how Byju’s allegedly used exploitative, immoral as well as illegal practices to force humbled parents into buying ‘essential’ courses for their children.
Watch: Byju’s valuation freefall sparks shareholder push for leadership change
Parents would get incessant cold calls and visits from salespersons to convince them that not subscribing to Byju’s courses would render their children poor forever. The company allegedly pushed parents, irrespective of their financial condition or whether children needed it, to buy their courses and even helped some of them get loans from their bank.
BBC quoted several current and former employees of the company as saying that they were often pushed to meet unrealistic targets. Several employees had to work for 12-15 hours at the company and speak to potential customers for at least “120 minutes” a day to get their presence marked on the working day.
That’s why when parents would apply for a refund or request cancellation; their calls were most often ignored, leaving families buried under heavy debt.
In one instance, a Byju’s salesman even got a man to subscribe to a loan without his consent, leaving him red-faced as he started receiving reminders from the company about an upcoming monthly installment.
When he visited Byju’s office to get the course cancelled, he was told the process was underway even though he was still being charged. Most of the parents targeted were from poor backgrounds, had little education, and were not tech-savvy.
2023: When Byju’s collapsed like a house of cards
Demand for online education started to subside in India as the pandemic ended. In April 2023, legal troubles started mounting for the company as the Enforcement Directorate (ED), India’s premier financial intelligence agency, raided Byju’s three offices for allegedly flouting the provisions of the Foreign Exchange Management Act (FEMA).
In 2023, one of the company’s foreign lenders too filed a lawsuit against Byju’s, making things worse. The year later saw mass firing across all departments in Byju’s.
As pressure from lenders mounts, Byju’s is now again seeking to raise $200 million from investors against the valuation of $250 million, a 99 per cent cut from the company’s peak valuation of $22 billion. But investors are adamant about removing Raveendran and family from the company’s board.
“We are deeply concerned about the future stability of the company under its current leadership and with the constitution of the board,” the investors reportedly said.
The American chapter of Byju’s has already filed for bankruptcy after defaulting on debt of $1.2 billion.
“Entrepreneurs are supposed to be stoic and steadfast. They indeed have an irrational capacity to suffer and the ability to eventually prevail over all that pain,” Byju Raveendran wrote in his letter to the employees.
(With inputs from agencies)