Byju’s is an ed-tech company which was started in 2011 by Byju Raveendran and Divya Gokulnath. Byju started CAT offline classes in 2008 and online in 2009 after scoring 100 percentiles in the exam himself, not once but twice. The company then got registered as Think & Learn focusing on the K-12 segment. In 2015, Byju’s app was launched, and the rise of the company began after the internet became cheaper in 2016.
The company became India’s first ed-tech unicorn in 2018 with a valuation of $1 billion.
Byju was doing exceptionally well when it got Shahrukh Khan as its brand ambassador in 2017 and in 2022 it signed a three-year deal with Lionel Messi.
It emerged as a leading online education platform that taught diversified subjects and prepared for a variety of exams. It employed the best teachers, provided comprehensive and personalized video lessons and delivered concept clarity.
A prominent company in the field of education had its fall from grace earlier this year. Let’s look at the multiple reasons for its downfall that made it a cautionary tale for entrepreneurs.
Out of Control Expansion Pursuits
Byju’s had been expanding the business for a long time, but the timing was all wrong. The steps weren’t taken before analysis. It focused heavily on selling courses and this market strategy got backlash.
Most of its expansion took place in COVID-19 when sales were already low and the company suffered with cash flow. During this time, it sponsored the Indian cricket team, the football World Cup and got Lionel Messi onboard as a global ambassador.
Facing internal and governance issues
Many of the high-post employees’ resignations including three of its board of directors signaled some internal conflicts and leadership issues. BCCI filed an insolvency petition due to sponsorship payment default.
In June, its auditors Deloitte Haskins & Sells suddenly left the engagement stating delayed financial statements that prevented them from completing the audit.
Byju’s Financial Troubles
It is struggling with cash crunch due to financial mismanagement, debt accumulation and loan defaults. Its valuation has significantly fallen. The company has laid off about 10,000 employees in the last year to stay afloat.
Legal Mismanagement
The company’s legal cases keep stacking up ranging from default payments, improper use of funds, insolvency petitions, Foreign Exchange Management Act violations, forcing employees to leave the company and many more. According to Inc 42, the legal trouble totals $1.5 billion for Byju’s. It casts a financial burden on the company as well as ruins its reputation.
Byju’s = Toxic Work culture
Last year, a video circulated on social media where a female employee was arguing with a senior over an incentive. Since then many news stories have come forward about the toxic work culture and unsolved grievances of the employees. Another employee was suddenly fired and sought the government’s help claiming she didn’t take a single leave over her 1.5 years of work.
Some of its reviews on Glassdoor mention that there is no work-life balance, and the only focus is on selling courses. Employees also mentioned verbal abuse. Overall, the environment is allegedly pressurized and exploitative to work in.
India’s top Ed-tech company lost its crown because of financial and operational mismanagement. It serves as a lesson to be ethical and take stable cautious steps in business.