Byju Raveendran on tenterhooks as appeals tribunal to decide on insolvency process
The founder of Byju’s argued in court that his company is solvent, and that insolvency could shut down the company and lead to 27,000 employees losing their jobs
Byju Raveendran and his company await anxiously the decision of an appeals tribunal that is expected to hold a hearing on Monday (July 22) on whether Byju’s insolvency process should be quashed.
The founder of Byju’s argued in court that his company is solvent, and that insolvency could shut down the company and lead to 27,000 employees losing their jobs. Insolvency would also mean bad news for investors in Byju’s like the Dutch technology investor Prosus.
We made our fair share of mistakes: Raveendran
Raveendran denied the allegations of mismanagement and wrongdoing at the company he founded and headed, though he admitted to making several mistakes.
“While growing fast, as I’ve accepted multiple times, we’ve made our fair share of mistakes,” he said during an interview at the World Economic Forum at Davos last year.
The company that was once India’s biggest startup with a valuation of $22 billion now has a valuation less than $2 billion. The company’s fortunes soared especially during the Covid pandemic when students were restricted to their homes and the online education business saw tremendous growth.
However, after the pandemic ended and students went back to school and college, Byju’s revenues dropped drastically. The company’s failure to pay $19 million in sponsorship dues to BCCI, India’s cricket federation prompted the tribunal to suspend Byju’s board and make Raveendran report to a court-appointed restructuring expert.
Several missteps
This was preceded by several mistakes on the part of Raveendran and his company including expensive acquisitions, spending too much on marketing, aggressive and questionable sales tactics that resulted in a backlash from aggrieved students and parents and damaged the company’s reputation, lawsuits from creditors over unpaid loans, and boardroom battles with foreign investors.
For the engineer who was hailed as a mathematics whiz, aced the management exam with 100 percentile score twice, and boasted of a shared net worth of $4 billion along with his wife Divya Gokulnath, insolvency would be a very difficult pill to swallow and may most probably mean the end to his dreams of building a global edtech giant.