The Embattled Edtech Group’s Founder Speaks Out
On Thursday afternoon, Byju Raveendran, the founder of the embattled edtech group Byju’s, acknowledged that he made mistakes in his business decisions. In an interview with a group of journalists, Raveendran stated that he overestimated the growth potential of his startup and mistimed the market.
A Company Worth $22 Billion Now Valued at ‘Zero’
Byju’s was once valued at $22 billion, but its current valuation is effectively zero. This drastic decline in value is due to the company’s aggressive acquisition of more than two dozen startups to expand into new markets. However, when financing dried up in 2022, this expansion strategy proved fatal.
Investors Urged Aggressive Expansion
Raveendran claimed that many of his over 100 investors urged him to pursue an aggressive expansion into as many as 40 markets. However, when global markets tumbled following Russia’s invasion of Ukraine, the venture capital market went into a downward spiral. As a result, many of Raveendran’s investors "ran away," leaving the startup in a precarious financial situation.
Departure of Key Backers
The departure of three key backers – Prosus Ventures, Peak XV, and Chan Zuckerberg Initiative – from Byju’s board last year made it impossible for the startup to raise additional funds. Representatives of these firms, along with auditor Deloitte, left the company’s board citing governance issues.
Byju’s Enters Insolvency Proceedings
As a result of its financial struggles, Byju’s has entered insolvency proceedings. Raveendran, who no longer controls the company, said: "It’s worth zero. What valuation are you talking about? It’s worth zero."
Byju’s Backers
Despite its current financial struggles, Byju’s counts several prominent investors among its backers, including BlackRock, UBS, Lightspeed, QIA, Bond, Silver Lake, Sofina, Verlinvest, Tencent, Canada Pension Plan Investment Board, General Atlantic, Tiger Global, Owl Ventures, and World Bank’s IFC. The company has raised more than $5 billion to date.
Raveendran’s Hope for a Comeback
Despite the dire circumstances surrounding Byju’s, Raveendran remains hopeful that his startup will make a comeback. He stated: "I have nothing to lose. I came from a small village. I invested everything I had into the startup."
Topics
- Byju Raveendran: Founder of Byju’s
- Byju’s: Edtech group in India
- EdTech: Education technology industry
- India: Country with a thriving startup ecosystem
- Startups: Young companies that disrupt traditional industries
About the Author
Manish Singh is a senior reporter at TechCrunch, covering India’s startup scene and venture capital investments. He has written for about a dozen publications, including CNBC and VentureBeat. Manish graduated in Computer Science and Engineering in 2015.
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