BYJU'S founder admits making ‘business mistakes', blames Russia-Ukraine war for crunch
Founder of edtech startup BYJU'S, Byju Raveendran, admitted that the company made "some business mistakes" when it expanded "too fast" to 21 countries due to the 'mandate' from the world-class investors.
BYJU's, the beleaguered edtech giant, has faced numerous problems in recent times after a period of great growth. Raveendran said that the company could have taken expansion a little slower but had to heed the mandate of the investors for growth in the Covid era.
"When we tried expanding from India to the whole world, we made some business mistakes. Maybe we could have taken it a little bit slowly. We were growing a little too soon, too fast. We went from India to 21 new countries. But if you ask me, in that context of 2019 to 2021, the Covid era, we have 160 investors, world-class investors, and equity investors. All of them - this was the mandate: grow, grow, grow and change the way kids learn," Raveendran told ANI news agency.
He also accepted that major investments that were promised by the investors did not come through due to "external macro reasons" such as the Russia-Ukraine war. Raveendran said the promised capital that was already signed was in tune of $700 million, but didn't turn up. This, according to him, impacted the expansion and acquisition plans of the startup.
"We were raising money for growth at that time. But when the world changed when interest rates went up, when Fed increased the interest rate and, almost simultaneously, the big war started, Russia and Ukraine, suddenly the liquidity dried up. 700 million of committed capital; signed committed capital didn't turn up," he added.
Byju Raveendran revealed that at that time in early 2022, the edtech company, which at the time was the most valuable in the country in the sector with about $22 billion valuation, was planning its acquisition plans and growth, assuming that they would get the promised funds. He also admitted that edtech has been struggling for liquidity for almost three years now.
BYJU'S was launched in 2015 and catered to students from kindergarten to class 12. The company achieved the 'Unicorn" status, valued at over $1 billion by 2019. The edtech startup then touched the $22 billion valuation mark in 2022, its all-time high.
Prosus, a firm that invests in tech-based companies, slashed BYJU's valuation by 75 per cent in 2024.
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