Byju’s Founder Ravendran Breaks Silence on Financial Woes, Slams Investors for “Running Away”
In a candid virtual press conference, Byju Raveendran, founder of troubled edtech giant Byju’s, spoke out for the first time since the company’s financial struggles began. Raveendran expressed regret over investors abandoning ship, exacerbating the company’s uphill battle.
Raveendran highlighted the irony of former board members, who had unanimously approved major acquisitions and expansion plans, now criticizing the company. “At the time, our board approved all major acquisitions and expansion plans with unanimous 6-0 voting. Today, it’s ironic that the same people are quick to criticize,” he said.
The Byju’s founder attributed the company’s financial woes to the sudden loss of investor confidence. “When the US lenders called a default and filed in the Delaware court, all three directors resigned within weeks. Three investors leaving the board together made new fundraising impossible, and that is why we’re here,” he explained.
Raveendran expressed frustration over investors’ lack of support during turbulent times. “Some investors, including Prosus, have not invested anything in 4-5 years.” He noted that during Byju’s aggressive expansion in 2020-21, investors had pushed for rapid growth, with some even advocating for simultaneous entry into 40 markets.
Raveendran defended the company’s expansion strategy, saying it was essential to Byju’s growth trajectory. However, he acknowledged operational missteps, stating, “In hindsight, it’s very easy to explain… we overestimated potential growth in the next two to three years and entered a lot of markets too soon. It was a little too much, too fast.” He accepted responsibility for the mistakes, saying, “Most of the acquisitions were brought in by investors, and we got carried away. That’s a mistake.”
Raveendran’s remarks come amidst ongoing legal battles with investors in US and Indian courts, ranging from loan repayment to allegations of mismanagement. Byju’s is currently facing insolvency proceedings after the BCCI alleged that the company defaulted on a payment of Rs 158.9 crore related to a sponsorship deal.
As of September 26, 2024, the Supreme Court of India has reserved its judgment on a petition challenging the National Company Law Appellate Tribunal’s (NCLAT) decision to allow a settlement. The verdict on whether Byju’s will undergo restructuring or liquidation is awaited.
Raveendran emphasized his commitment to turning things around, saying, “I have been on the edge so many times… I only need to see 1 percent chance to make it work.” Despite acknowledging the tumultuous period following the mass resignations, Raveendran struck a tone of restraint, saying he is “not blaming them still.”
Byju’s crisis unfolded in June 2023, when three members of its board, along with its official auditor Deloitte, resigned. Early backers GV Ravishankar, Russell Dreisenstock, and Vivian Wu subsequently stepped down from the board. The development intensified the downward spiral at what was once the most-valued privately held Indian startup, which had reached a peak valuation of $22 billion.
The company’s struggles have been further compounded by court cases involving lenders, loan defaults, valuation markdowns by existing investors, and delays in filing its financial results for the year ending March 31, 2022.
Raveendran’s virtual press conference marked a rare public appearance by the Byju’s founder, who has faced increasing scrutiny over the company’s financial management.
Byju’s current valuation stands at zero, with Raveendran admitting, “We have lost the confidence of the investors, and the situation has become dire due to our debts and operational issues.” Despite this, Raveendran remains committed to reviving the company.
The Supreme Court’s verdict on Byju’s fate will be closely watched, as the edtech industry grapples with the implications of the company’s downfall.
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