From $22 billion peak to debt traps and lawsuits: How Byju's empire collapsed over the years

Byju's, which was once known as India’s successful ed-tech startup, is now juggling between courtrooms and millions of debut. Its founder, Byju Raveendran, has now been sentenced to six months in jail by a Singapore court for disobeying court orders involving his assets. 

The company’s trajectory shifted from rapid growth to operational and financial challenges, ranging from audit delays, increasing liabilities, investor concerns, insolvency proceedings, and cross-border legal disputes. 

In 2022, Byju’s was at its peak, from a $22 billion company valuation, appointing football icon Lionel Messi as the global brand ambassador for its social impact, to representing the brand in the Indian cricket team's jersey. Here’s how Byju’s went from fast-growing edtech to a cautionary tale. 

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Byju’s success journey

The ed-tech startup, Byju’s, was founded in 2011 under the name Think & Learn Pvt Ltd, and gained immense traction in India for education and coaching for competitive exams. The company was built amid the smartphone boom, and its peak was established during the COVID-19 era, when digital education exploded as schools were shut.

Byju’s also acquired Aakash Educational Services in a deal which is said to be worth nearly $3 billion. The shift came in November 2021, when Byju's secured a massive $1.2 billion term loan from international lenders, which signalled Indian startups’ arrival on the global stage.

But the loan emerged as a key trigger of its downfall. Byju’s reportedly delayed submitting its audited financial statements, and this started raising questions over transparency and the company’s governance standards.

The delayed FY21 financial statement revealed a sharp decline, with losses expanding to over Rs 4,588 crore, which came as a major red flag for investors and lenders. Deloitte left as auditor due to delays in financial reports and poor communication. Later, BDO Global’s India affiliate also resigned.

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Hidden money, Insolvency, Employees unpaid, and the list continues

By late 2022 and early 2023, tension escalated into a global legal dispute. Lenders accused Byju’s of breaching loan terms and alleged that over $500 million linked to a term loan was moved without proper disclosure through multiple entities.

Lawsuits against the company were filed in Delaware, New York, and Singapore, questioning its financial structure and governance. Recently, Singapore found that the company did not follow several legal instructions related to disclosing information about its assets.
Later in July 2024, the insolvency proceedings started over unpaid money owed to the BCCI, even while the company was already battling much larger legal and debt issues globally.

Amid the legal battles, Byju’s employees started complaining of delayed salaries, and layoffs also started across teams. Many investors and global lenders accused the company of poor management and governance.

Byju's crashed from a $22 billion giant to a valuation of nearly $1 billion, as Forbes cut Byju Raveendran’s net worth to zero.

Now, Byju’s downfall comes as a cautionary tale for other startups and businesses. The company reportedly had several problems. Firstly, it started expanding rapidly and relied heavily on borrowed money. It is said to have poor management practices, oversight, or transparency, which led to serious problems.