The archive · Education & Work · Financial decision · 2021–2024
Byju's acquisition spree ends in insolvency: founder says once-$22B edtech is 'worth zero'
Byju's bought two dozen companies on pandemic optimism, then lost investors; insolvency opened in July 2024 over a ₹158.9 crore sponsorship debt.
Byju's
What the business is
An edtech company selling online test-prep courses to Indian school and college students, later blended with offline coaching through acquisitions.
Starting capital：Raised more than $5 billion in total
How it started
Byju's, founded by teacher Byju Raveendran, rode India's COVID-era online-learning boom to become the country's most valuable startup, raising over $5 billion and reaching a $22 billion valuation. In 2021 it bought Aakash Educational Services, a chain of more than 200 offline coaching centres serving 250,000 students, for close to $1 billion — about $600 million in cash plus stock — its largest deal in a spree of more than two dozen acquisitions.
What happened
By 2022 the financing that paid for growth dried up. Byju's missed financial reporting deadlines, fell more than 50% short of revenue projections, and board members and auditor Deloitte resigned citing governance issues; investors including Prosus, Peak XV and the Chan Zuckerberg Initiative later left the board. A rights issue valuing the company at just $25 million enraged existing investors, a court blocked a second one, and BlackRock wrote its stake down to zero. The company had also defaulted on sponsorship dues owed to the BCCI from its Indian cricket team jersey deal, taken on in 2019 and exited around December 2022.
How it ended up
On July 16, 2024, the NCLT Bengaluru bench admitted BCCI's petition over unpaid dues of about ₹158.9 crore ($19 million), initiated insolvency proceedings and installed an interim resolution professional, effectively removing the founder from control. Raveendran later conceded the company was 'worth zero', saying the acquisition of two dozen startups proved fatal once financing dried up in 2022.
Background
Byju's, founded by teacher Byju Raveendran, became India's most valuable startup by selling online test-prep courses into the COVID-era learning boom, raising more than $5 billion and reaching a $22 billion valuation. In April 2021 it bought Aakash Educational Services — a chain of more than 200 offline coaching centres serving 250,000 students — for close to $1 billion in cash and stock, its largest deal in a spree of more than two dozen acquisitions.
The growth was funded on borrowed time. By 2022 Byju's missed financial reporting deadlines and fell more than 50% short of revenue projections; board members and auditor Deloitte resigned citing governance issues, and investors including Prosus, Peak XV and the Chan Zuckerberg Initiative left the board. A rights issue valuing the company at just $25 million outraged existing investors, a court blocked a second one, and BlackRock wrote its stake down to zero.
The end came through a small bill. Byju's had sponsored the Indian cricket team's jerseys from 2019, exited the deal around December 2022, and stopped paying; the BCCI filed an insolvency petition in September 2023. On July 16, 2024 the NCLT Bengaluru bench admitted the plea over dues of about ₹158.9 crore ($19 million), began insolvency proceedings and installed an interim resolution professional, removing Raveendran from control. He later said the startup was 'worth zero', and that buying two dozen companies proved fatal once financing dried up in 2022.
What has to be true
- The bet assumed pandemic-era online-learning demand would keep compounding, so Byju's spent billions acquiring companies and marketing when the market had already turned.
- Financing dried up in 2022, and with board members, the auditor and key investors resigning over governance, no new equity was available to cover the bills.
- Byju's kept spending on commitments like the cricket sponsorship while revenue fell more than 50% short of projections, so a comparatively tiny ₹158.9 crore debt was enough to trigger insolvency.
- A rights issue at a $25 million valuation — versus $22 billion at peak — destroyed the remaining investor trust and left no path to recapitalize.
What can be applied
Acquisition-fueled growth works only while capital keeps flowing; when markets turn, the spree becomes fixed costs, and a single unpaid bill can trigger insolvency.
Aftermath
As of October 17, 2024, Byju's is under insolvency resolution: an interim resolution professional runs the company, claims have been invited from creditors, and founder Byju Raveendran no longer controls it. It was locked out of more than 100 tuition centres over unpaid rent and electricity, faced a demand notice from 62 former employees over about ₹2.3 crore in unpaid salaries, and was under investigation by the Enforcement Directorate. Raveendran said he hoped for a comeback but conceded the once-$22 billion startup was effectively 'worth zero'.
Sources
- Byju's acquires Indian tutor Aakash for nearly $1 billion
- Byju's, once valued at $22 billion, faces insolvency proceedings
- NCLT Admits BCCI Plea Seeking Insolvency Proceeding Against BYJU'S
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