Byju's is now worth zero, admits founder Raveendran

Once India’s most valued start-up, with a tag of $22 billion in 2022, Byju's valuation has now dropped to zero. Byju Raveendran, the founder of Byju’s, admitted this via video conferencing from Dubai, where he talked about a range of issues including the biggest setback for India's erstwhile biggest startup, dispute with BCCI, fund raising, why he has left India and staying in Dubai and more.

While some analysts pointed to its aggressive inorganic expansion as a factor in its poor performance, Raveendran stated that the company “overestimated potential growth and entered too many markets at once. It was a bit too much, too soon.”

In the candid media briefing, Raveendran said, “Most of the acquisitions were brought in by the investors and we got carried away. Investors wanted us to launch in 40 countries together. Investors celebrated when we raised a $1.2 billion loan.”

In June 2023, board members from Peak XV Partners, Prosus, and the Chan Zuckerberg Initiative stepped down. The Byju’s founder stated that the resignations were prompted by a loan default case in a Delaware court, as investors were concerned they might be held responsible for repaying the $1.2 billion loan.

The lenders of the $1.2 billion Term Loan B (TLB), represented by their administrative agent Glas Trust, filed a complaint in the Delaware Court of Chancery, claiming default on payments and requesting early repayment.

Although Raveendran expressed optimism about a turnaround once the insolvency issue is settled, reports quoting him said, “Our subsidiary has not taken any hits. At consolidated level we will have more than Rs 5,000 crore in revenue. We are struggling in the core business which has become zero. Still there are 200 million kids who come to our platform every month. We have to revamp and revive.”

Byju’s is now facing insolvency proceedings, which were prompted by the BCCI's efforts to recover Rs 158.9 crore in unpaid dues. The company resolved its dispute with the cricket body by fully paying the outstanding dues, resulting in the National Company Law Appellate Tribunal lifting the insolvency proceedings.

However, US lenders via Glas Trust challenged the NCLAT ruling in the Supreme Court, resulting in the restoration of the insolvency proceedings against the edtech startup.