From Rs 1880000000000 to Rs 0: A teacher who became a billionaire, one wrong decision made him bankrupt, his name is...

India.com

5 days ago

New Delhi: No one ever thought that the coaching institute for which Bollywood actor Shah Rukh Khan would advertise on TV for admissions would reach such a state. The situation got so dire that Google Play Store delisted them from their platform. This means you will no longer see this app on Google Play Store. The company that touched a valuation of 22 billion dollars, around Rs 1.88 lakh crore rupees in 2022, saw such a change in circumstances in the next two years that it reached zero. Today's story is about Byju Raveendran's fall from grace.
When the TV was turned on or a page of the newspaper was flipped, there was a time when Byju's advertisements were everywhere. The company was sponsoring Team India's jersey and tournaments like IPL, but a mistake turned them from hero to zero. The company's wealth plummeted to zero in two years. The company took on more debt than it needed. They didn't have enough money to pay their employees' salaries. The situation became so critical that they had to mortgage their homes.
Byju Raveendran was born in 1980 in a simple family in Kerala. His mother was a math teacher and his father a physics teacher. Byju was outstanding in studies since childhood. After completing his B. Tech, he took a job at a shipping company. When he came home during the holidays, his friends who were preparing for CAT asked him for help. Since Byju had scored 100 percent in CAT, he began to prepare his friends for the exam. Their results improved, so he left the job and started teaching.
Byju's started coaching classes at home. They used to hold tuition classes in their room. Soon, their popularity began to grow. As the room became too small for teaching, they started teaching in a stadium. In 2007, they launched Byju's Classes. During this time, he fell in love with one of his students, and they got married. Together with his wife Divya Gokulnath, they started an edtech company and launched Think and Learn Private Limited.
Byju's soon began offline classes. In 2013, Ranjan Pai, chairman of the Manipal Group, and Mohandas Pai, CFO of Infosys, invested in Byju's. In 2015, the company launched its app. In 2016, the company received an investment of Rs 1200 crores. In 2017, it received an investment of Rs 600 crores. In 2018, the company's valuation reached 1 billion dollars, making it the first edtech company in the country to join the unicorn club. In 2020, during the COVID pandemic, the company's growth accelerated. From 2017 to 2021, Byju's acquired 17 companies.
Byju's has spent money on its advertisements like water. Celebrities like Shahrukh Khan and Sourav Ganguly have been seen endorsing it. The company secured the main sponsorship for the IPL. An advertising deal was signed for the jersey with the BCCI. In 2022, it sponsored the FIFA World Cup. The company made a deal worth crores with Lionel Messi. In its pursuit of speed, the company made several mistakes, and its downfall began. The company acquired WhiteHat Jr for 300 million dollars, which proved to be a loss-making deal. It continued to fall short of meeting its targets.
The company's losses reached up to 456.4 billion rupees. The burden of debt was increasing on the company, and with schools and colleges reopening after COVID, the losses faced by Byju's also accelerated. The number of students in online classes decreased, along with the company's profits. The company did not file its financial results for 2021-22 for a year, due to which members of the China board and auditors distanced themselves from it. In 2023, tech investor Prosus reduced the funding for Byju's, resulting in significant losses for the company and necessitating major layoffs.
Despite the losses, the company spent money on marketing like water. Parents and students began to question the quality of Byju's courses. Investors started to leave. By 2023, the company made it clear that its valuation had fallen to zero. The valuation of Byju, which was $22 billion in 2022, now stands at zero. To pay salaries, Byju Raveendran had to mortgage his own house.
Wrong decisions and acquisitions without proper assessment weighed heavily on Byju. Overall, mismanagement has sunk Byju. By 2023, the situation worsened, and the ED began investigating the violation of FEMA. American creditors demanded bankruptcy. Employees started to leave. By 2024, Byju's valuation had dropped to zero. The company reached the brink of bankruptcy due to legal battles, a mountain of debt, and mismanagement.