Byju’s: From Unicorn to Insolvency in India’s Startup Saga
Byju’s, the once-heralded Indian startup, has now filed for bankruptcy, signaling a sharp decline from its peak as the nation’s most valuable startup, valued at $22 billion in 2022. The Board of Control for Cricket in India (BCCI) filed a plea with the National Business Law Tribunal (NCLT) in Bengaluru, blaming Byju’s parent business, Think and Learn, for defaulting on a ₹158 crore debt. The NCLT accepted the plea. Byju’s unpaid sponsorship obligations for the Indian cricket team’s jerseys led to this debt, underscoring the financial difficulties exacerbated by the pandemic’s economic downturn.
Byju Raveendran and Divya Gokulnath founded the company in 2011, and with its creative approach to online learning, it quickly rose to prominence. By 2018, it had 15 million users and had become a unicorn. Lockdowns during the COVID-19 epidemic increased demand for remote learning solutions and drove Byju’s worth to previously unheard-of levels. However, investor funding dried up during the epidemic, and ambitious expansion initiatives, including billion-dollar acquisitions, led to a decline.
Financial difficulties worsened as Byju’s valuation fell from $22 billion to less than $2 billion due to significant markdowns by influential investors such as Prosus and BlackRock. Claims of boardroom conflicts and corporate governance failings further damaged its reputation, ultimately leading to the resignation of important auditors and board members.
NCLT initiated insolvency proceedings, freezing Byju’s assets and placing the board under the supervision of an interim resolution specialist. This legal action highlights the difficulties Indian entrepreneurs confront in maintaining rapid development in the face of unstable market conditions and investor scrutiny.
Byju’s is hopeful that it can work out its financial issues with BCCI amicably, which marks a turning point in the company’s evolution from a disruptor in education technology to one that must navigate intricate legal and financial restructuring procedures. In addition to having an effect on Byju’s future, the outcome of these legal actions will be a gauge for the Indian startup scene as it deals with the fallout from rapid growth and ensuing financial limitations.
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