From dominating cricket jerseys and international billboards to fighting multiple lawsuits and insolvency proceedings, Byju's dramatic fall marks one of India's most stunning corporate reversals. The edtech giant that once symbolized India's digital education boom now struggles for survival amid mounting legal challenges and financial distress.
The Meteoric Rise and Pandemic Boom
Founded in 2011 by Byju Raveendran, the learning app capitalized on India's growing smartphone adoption and competitive exam culture. However, it was the COVID-19 pandemic that transformed Byju's into a global powerhouse. As students shifted online, the company embarked on aggressive expansion, spending heavily on marketing, celebrity endorsements, and strategic acquisitions.
The company reached its peak valuation of $22 billion in 2022, making it one of India's most valuable startups. Its branding became ubiquitous across cricket tournaments and international markets, backed by massive funding rounds and investor confidence. During this period, Byju's acquired major players including Aakash Educational Services for nearly $1 billion, Great Learning, and Epic, establishing itself as a comprehensive education platform.
The Unraveling Begins: Financial Strain Emerges
As pandemic restrictions eased and students returned to classrooms, Byju's growth momentum slowed dramatically. The company's heavy reliance on aggressive sales tactics and continuous fundraising began showing cracks. By financial year 2022, consolidated losses had ballooned to approximately Rs 8,245 crore, nearly doubling from the previous year.
Auditors raised red flags about the company's ability to continue as a going concern. Deloitte, the company's auditor, resigned citing prolonged delays in receiving financial statements, followed by BDO (MSKA & Associates) in 2024 for similar communication lapses. These accounting issues triggered scrutiny from the Ministry of Corporate Affairs and damaged investor confidence.
The $1.2 Billion Term Loan Battle
A critical turning point came with the $1.2 billion term loan raised in 2021 for global expansion. Lenders accused Byju's of breaching debt covenants, particularly delayed financial disclosures. The dispute escalated when creditors alleged the company had moved $533 million to an obscure investment fund without proper disclosure.
The legal battle spanned multiple jurisdictions, with Byju's suing lenders in US courts while facing counter-allegations of fund diversion. US courts eventually seized assets of Byju's Alpha, the company's US subsidiary, deepening the liquidity crisis and complicating refinancing efforts.
Insolvency Proceedings and Asset Battles
The crisis reached a new level when the Board of Control for Cricket in India (BCCI) initiated corporate insolvency resolution proceedings against Think & Learn Pvt Ltd, Byju's parent company, over unpaid sponsorship dues of approximately Rs 159 crore. This marked the first instance where sponsorship defaults directly triggered insolvency against a unicorn-stage tech company.
Simultaneously, a governance battle erupted over Aakash Educational Services, once considered Byju's crown jewel asset. As Think & Learn faced insolvency proceedings, it couldn't participate in Aakash's rights issue, threatening to reduce its stake from 25.75% to under 5%. The Supreme Court of India ultimately cleared Aakash's path to proceed with the capital raise, potentially costing Byju's control over its most valuable asset.
International Legal Fallout and Default Judgment
The company's troubles extended beyond Indian borders when a Delaware bankruptcy court issued a default judgment of approximately $1.07 billion against founder Byju Raveendran. The ruling came after repeated non-compliance with discovery orders related to fund transfers from the US subsidiary.
The court demanded a detailed accounting of how hundreds of millions of dollars were moved through entities including Camshaft Capital Fund and offshore trusts. This international scrutiny raised serious questions about corporate governance standards and complicated ongoing negotiations with creditors.
Operational Cracks and Sales Culture Concerns
Even during its peak growth, Byju's faced criticism for its aggressive sales-driven culture. Former employees described pressure to hit targets through questionable tactics, including persuading low-income households to take financing for expensive courses. Reports suggested that in some cases, the company credited instalments directly to financiers when customers defaulted, maintaining revenue recognition despite payment issues.
The company's work culture came under scrutiny with reports of long hours, high attrition, and performance-driven management that prioritized sales over pedagogical excellence. As financial stress mounted, these operational weaknesses eroded consumer confidence and damaged the brand's reputation.
Lessons for India's Startup Ecosystem
Byju's dramatic rise and fall offers crucial lessons for India's booming startup ecosystem. The episode demonstrates that rapid growth through acquisitions and marketing burn doesn't guarantee long-term stability without sustainable unit economics. Companies must prioritize cash flow management and maintain adequate reserves rather than relying solely on continuous fundraising.
The importance of robust corporate governance and transparent financial reporting cannot be overstated. As regulators and courts increase scrutiny, compliance becomes central to credibility. Additionally, global ambitions require sophisticated legal planning and risk management across jurisdictions.
Today, Byju's valuations have plunged from $22 billion to near-distressed levels, with major investors exiting the board and layoffs continuing amid severe liquidity constraints. The coming months will determine whether the company can stabilize operations, rebuild trust, and manage its global legal obligations, or whether the fall from grace will continue.
