Byju’s CEO Byju Raveendran’s Wealth Drops to Amidst of Crisis

Byju Raveendran, the visionary behind edtech giant BYJU’S, has experienced a remarkable reversal of fortune, seeing his wealth dwindle from a staggering INR 17,545 Cr ($2.1 Bn) to nothing, as reported in the latest Forbes Billionaire Index 2024.

Related: BYJU’S Terminates 500 Employees in Restructuring Move

This downturn aligns with a series of challenges that have emerged within the edtech giant over the past year. Once hailed as the nation’s most prized startup valued at $22 Bn, BYJU’S has lately been making headlines for less favorable reasons, with the internal turmoil now leading to Raveendran’s exclusion from the prestigious list of the world’s wealthiest individuals.

Established in 2011 by Raveendran and his wife Divya Gokulnath, this educational technology startup swiftly gained prominence thanks to the surge in demand during the pandemic period, securing substantial venture capital backing.

In response to widespread school closures, the company introduced a variety of educational products tailored to students ranging from elementary school pupils to those aspiring for UPSC exams. Benefiting from significant financial resources, it also embarked on several significant acquisitions and opted for a term loan B (TLB), anticipating the sustained growth driven by the pandemic.

Unfortunately, the FOMO frenzy of 2021 fizzled out when the funding winter hit early in 2022. Cautious investors started holding onto their cash tightly as interest rates climbed and market unpredictability became the new normal.

With schools reopening and economic challenges looming large, the edtech unicorn found itself on a downward trajectory. The scarcity of funds during the 2022 funding winter made matters worse. Despite previous acquisitions, the company faced mounting losses with no silver lining in sight.

Adding to the problem was the lack of transparency in the company’s operations. BYJU’S frequently postponed its financial reports, leading to dissatisfaction among investors and other stakeholders. The company finally released its financial results for the fiscal year ending in March 2022 (FY22) after a two-year delay, revealing a total loss of over $1 billion.

Consequently, the company initiated extensive staff reductions in 2022 as part of a restructuring effort to streamline operations. Over 5,000 employees have been let go since then, and the company has had to postpone employee salaries twice this year.

Additionally, the company is entangled in a legal dispute with its creditors concerning a $1.2 billion TLB, tarnishing the once sterling reputation of the startup within the Indian startup community. Furthermore, the company is grappling with a myriad of legal challenges, including insolvency proceedings, lodged in various courts nationwide.

The company is currently engaged in public disputes with its investors, who recently organized an extraordinary general meeting (EGM) in an attempt to remove Raveendran and his family members (wife and brother Riju Ravindran) from the board of directors. In addition, the edtech giant is being scrutinized by the Enforcement Directorate (ED) for suspected foreign exchange violations totaling INR 9,362 Cr.

Raveendran found himself in such a tough spot that he reportedly had to use two of his houses as collateral to cover the salaries of the employees at the prominent edtech company. Meanwhile, due to a ruling by the NCLT, the company is currently unable to access the funds from its recent $200 million rights issue until further notice.

These challenges have led to a significant downfall for Byju Raveendran. Once a celebrated figure in the startup world, his net worth has plummeted to zero, according to Forbes. With all the ongoing turmoil within the company, everyone is now watching closely to see if he can navigate through these difficult times and guide BYJU’S out of troubled waters.

BYJU’S, founded in 2011, surged to prominence by offering educational products during the pandemic, securing substantial funding. However, the 2022 funding winter brought financial challenges, leading to mounting losses and delayed financial reporting. Extensive staff reductions and legal entanglements, including insolvency proceedings and disputes with creditors, further exacerbated the situation. The lack of transparency and personal sacrifices, like using personal assets as collateral, underscored the company’s turmoil. Regulatory hurdles and limited access to funds added to BYJU’S woes, ultimately contributing to Byju Raveendran’s net worth plummeting to zero, marking a stark downfall from his previous billionaire status.