The Rise & Fall of Byju's, founded by Byju Raveendran

Byju's is one of India's most successful educational technology companies, offering online learning platforms and educational resources to students of all ages. Founded in 2008 by Byju Raveendran, Byju's has revolutionized the education sector in India through its innovative technology-enabled learning solutions and personalized approach to teaching. Here's a look at the success story of Byju's and its unique business model:

1. Personalized Learning Experience: Byju's business model revolves around providing a personalized learning experience to students through its online learning app. The platform offers interactive video lessons, practice questions, quizzes, and adaptive learning modules that cater to the individual learning pace and style of each student. Byju's leverages data analytics and artificial intelligence to track student progress, identify learning gaps, and provide customized recommendations to enhance the learning outcomes.

2. High-Quality Content and Pedagogy: Byju's differentiates itself by offering high-quality educational content created by subject matter experts and experienced educators. The company ensures that its video lessons are engaging, easy to understand, and aligned with curriculum standards, making learning more effective and enjoyable for students. Byju's focuses on making complex concepts simple and accessible, helping students build a strong foundation in various subjects.

3. Adaptive Learning Technology: Byju's utilizes adaptive learning technology to personalize the learning journey for each student. The platform analyzes the performance and behavior of students to offer targeted remedial exercises, revision modules, and advanced challenges based on their strengths and weaknesses. This adaptive approach ensures that students receive tailored support and guidance to improve their understanding and academic performance.

4. Expansion into Different Segments: Over the years, Byju's has expanded its offerings beyond school education to cater to different educational segments. The company has launched specialized courses for test preparation, competitive exams, professional certification programs, and skill development, addressing the diverse learning needs of students across age groups and domains. By diversifying its product portfolio, Byju's has strengthened its market presence and captured a wider audience base.

5. Strategic Partnerships and Collaborations: Byju's has formed strategic partnerships with schools, educational institutions, and government bodies to reach a larger audience and deliver its educational content through integrated platforms. The company has collaborated with educational boards, educational technology companies, and content providers to enhance its offerings and expand its reach in domestic and international markets. By forging strong partnerships, Byju's has accelerated its growth and established a strong presence in the education ecosystem.

6. Continuous Innovation and Technology Integration: Byju's emphasizes continuous innovation and technology integration to enhance the learning experience and stay ahead of the competition. The company invests in research and development to develop new features, tools, and learning methodologies that leverage emerging technologies such as AI, AR/VR, and gamification. By incorporating cutting-edge technology into its platforms, Byju's ensures that students have access to engaging, interactive, and effective learning experiences.

Overall, Byju's success can be attributed to its customer-centric approach, focus on quality education, personalized learning solutions, adaptive technology, strategic partnerships, and commitment to innovation. By revolutionizing the way students learn and empowering them with knowledge and skills, Byju's has become a trusted name in the edtech industry and a market leader in online education in India.

The Fall of bankruptcy:

However, the focus on education and technology shifted towards a massive sales operation, involving celebrity endorsements like Shah Rukh Khan and Lionel Messi, with a strong emphasis on selling courses through Byju's Learning App.

With the assistance of inexpensive and overly enthusiastic venture capital, his eponymous company transformed into an acquisitions powerhouse, splurging almost $3 billion worldwide during the pandemic-induced frenzy for remote learning.

The consequences have been devastating. A mere 15 months ago, the startup commanded a value of $22 billion. Presently, one of its primary investors has slashed Byju’s appraisal to below $3 billion. Prosus NV, along with two other early supporters, Peak XV and the Chan Zuckerberg Initiative, have departed from the edutech board. Byju’s Alpha, a US financing entity, has come under the control of creditors due to an unpaid $1.2 billion term loan.

The group is encountering a severe liquidity crisis. Amid extensive job cuts and significant losses, the former billionaire founder has liquidated his residences to meet payroll obligations. Nonetheless, Raveendran is not entirely bereft of options. Byju’s could secure funds by divesting Epic!, its US-based children’s digital reading platform. Domestically, its physical test-prep segment has attracted attention from a wealthy Indian investor. Through a sale or an initial public offering of the division, the prized asset of the shrinking empire could fetch over the nearly $1 billion that Byju’s had disbursed for it in 2021.

All hopes for a recovery would fade if Byju’s faced bankruptcy, although the probability of that is currently low. The Board of Control for Cricket in India has instigated an insolvency plea, claiming that the company defaulted on its sponsorship payments. Nonetheless, the sum in question is not substantial, and the board might be amenable to a payment arrangement. Existing investors could aid in alleviating the funding squeeze, yet Raveendran may have to consent to a considerably lower valuation.

How did things deteriorate so rapidly and to such an extent? The sales mechanism that propelled Byju’s swift rise to becoming the world’s most valuable edutech also played a significant role in its downfall, according to The Learning Trap, a fresh publication by Morning Context journalist Pradip Saha.

The author interviewed several present and former employees to portray a portrait of an exceedingly toxic work atmosphere. Sales personnel mentioned enduring verbal abuse and being required to report for duty even on sick leave, enabling their superiors to place them on medical leave after verifying their legitimate illness. Toiling 12 to 14 hours, six days weekly, frontline staff were made to feel guilty for desiring to depart at 10 p.m. The pressure to achieve targets was so intense that some representatives implored their relatives and acquaintances to purchase products and falsify a sale closure, only to nullify it subsequently and seek a refund. The book alleges that in numerous cases where clients had ceased payments, Byju’s was crediting the monthly installments to creditors. The payment plans were the sole means by which low-income families could manage to shell out approximately $600 plus taxes initially for a two- or three-year program, although lenders are now apprehensive about underwriting them.

Byju’s contends that many of the instances spotlighted in the book are not systemic weaknesses but localized slip-ups that transpired in the past—amid a phase of exceedingly rapid expansion. The processes have been reinforced since then. Rehashing the accusations perpetuates a cycle of “incomplete, sensational, and deceptive discourse,” and shows “a lack of consideration for the challenges faced in scaling a business like Byju’s,” the company stated in a declaration.

An educational establishment ought to have exhibited greater attention to culture. When its appraisal was soaring, investors disregarded Byju’s excessively aggressive sales maneuvers. However, as the conclusion of the pandemic tempered growth, they could not overlook its corporate governance shortcomings. In June, Deloitte Haskins & Sells, the former auditor, suddenly exited, citing protracted delays on the company’s part. For the fiscal year culminating 21 months ago, the group has yet to submit its audited accounts to regulatory authorities.

Additionally, there are claims of lax financial oversight. Following the seizure of the US entity that defaulted on $1.2 billion of debt, creditors alleged in court documents that $533 million of it had been concealed from them by parking it with an obscure hedge fund that previously designated an IHOP pancake eatery in Miami as its primary site of business. Byju’s contention in US court proceedings was that it was endeavoring to safeguard the money from predatory lenders.

The investigation into Byju’s in India for purported infractions of the country’s foreign-exchange controls has concluded, although the outcome remains unclear. The Bengaluru-headquartered firm has affirmed complete adherence to the regulations and stated that any penalties for delayed reporting, if imposed, will be minimal. Nevertheless, with the group chief legal officer announcing his departure this month, it is premature for investors to adopt a sanguine view regarding legal entanglements. Neither can they be excessively optimistic about the startup’s recent forays into advancing generative artificial intelligence for “hyper-personalized learning.” Fresh growth efforts can only yield dividends once survival is assured.

Raveendran appears to have squandered a colossal opportunity. When he introduced his application in 2015, internet accessibility via smartphones was on the brink of explosive growth, propelled by affordable data. Byju’s could have bridged the chasm between India’s disparate school curricula and the coaching enterprises to which the nation’s anxious adolescents flock to excel in arduous pre-university, MBA, and civil service assessments.

A skilled educator himself, all Raveendran required was a modicum of philanthropic funding and a close-knit team of committed educators and technologists. The complimentary education initiative it operates in some of India’s neediest regions in conjunction with a government body may assist in alleviating the repercussions of school closures during the pandemic. To effect a more enduring impact, Byju’s could have devised reasonably priced courses that did not necessitate a sales apparatus—oor shrewd financial machinations—to promote them nationwide.

Would Byju’s have enjoyed a less glamorous yet more stable trajectory had it functioned as a nonprofit akin to Khan Academy? Raveendran was too impatient to ascertain. The founder and his venture capital endorsers opted for breakneck expansion over societal relevance. The educational app metamorphosed into a pitfall.