Education: ED bars Byju’s CEO Raveendran from foreign travels
Virendra Pandit
New Delhi: From being a high-achiever in 2022, what a great fall he has suffered now.
Founded in 2011 by Byju Raveendran and Divya Gokulnath, education technology behemoth Byju’s claimed to have over 150 million registered students in April 2023, and became a decacorn with a valuation of over USD 10 billion.
Then it suffered a free fall. As of January 2024, its valuation plummeted to only USD 200 million, a sharp fall from its peak of USD 22 billion in 2022.
On Thursday, with more trouble in offing, the Enforcement Directorate barred its CEO Byju Raveendran from traveling outside the country. The central agency probing financial crimes issued a lookout circular against the 43-year-old entrepreneur.
Earlier, the ED had issued a lookout circular ‘on intimation’ meaning that immigration authorities would inform officials concerned about any foreign trip by Raveendran, but now he can be stopped from leaving the country.
The edtech firm, once valued at over USD 20 billion and the poster boy of India’s start-up ecosystem, suffered massive losses last year and about a 90 percent dip in valuation. Its auditor Deloitte has resigned. Byju’s is also locked in a legal fight with lenders in the US over a USD 1.2 billion loan.
Raveendran, a former engineer who witnessed a meteoric rise before the ongoing crisis, has been under fire for the edtech firm’s dipping fortunes.
A group of shareholders had requested for an extraordinary general meeting tomorrow to oust Raveendran and appoint a new board. But he got some relief from a Karnataka High Court order that said any decisions taken at the meeting would be invalid till the next hearing.
Byju’s has said the meeting was “merely a smokescreen designed to disrupt the management, control, and functioning of the company.”
Investors said the court had not prohibited the shareholder meeting, which could be held, and they would still push to remove Raveendran as CEO.
Byju’s key investors include tech investor giant Prosus, US growth equity firm General Atlantic, and the Chan Zuckerberg Initiative — a philanthropic venture founded by Facebook boss Mark Zuckerberg and his wife Priscilla Chan. Representatives of Prosus and the Chan Zuckerberg Initiative stepped down from Byju’s board last year.
Back in 2006, Byju Raveendran formally launched classes for MBA aspirants preparing for the CAT exam. The edtech firm gradually expanded to undergraduate and then school students. In 2015, the Byju’s learning app was launched. In the next four years, it had become the country’s first ed-tech unicorn. The Covid pandemic saw rapid expansion of Byju’s network as schools were shut, and school teaching shifted online.
Then the troubles began. Allegations of a toxic work atmosphere and aggressive marketing that harassed parents started emerging. Last year, Prosus cut Byju’s valuation by 75 percent, leading to layoffs and allegations of financial mismanagement.
At its peak, the edtech firm had spent massively on sponsorship. It sponsored the Indian cricket team, the Football World Cup, and signed football legend Lionel Messi as a global ambassador. Actor Shah Rukh Khan was Byju’s brand ambassador in India for six years.
Growth slowed down after schools reopened and Byju’s stared at towering losses. Late last year, Byju Raveendran had to mortgage personal properties to arrange a loan to pay staff salaries.
Byju’s foreign investment has also come under the scanner of the Enforcement Directorate. Before the lookout circular against its founder, the ED issued show-cause notices to Byju’s parent firm Think & Learn over alleged violations worth over Rs. 9,362 crore under the Foreign Exchange Management Act (FEMA).
