Byju's facing heat over 'violation' of foreign funding laws, asked to pay Rs 9,000 crore
This follows ED’s searches at 3 premises in Bengaluru in April in the case involving founder Byju Raveendran and his firm under FEMA
The Enforcement Directorate (ED) has issued a notice to educational technology giant Byju’s, asking it to pay ₹9,000 crore for allegedly violating foreign funding laws, sources said. The firm has, however, denied having received any such communication from the authorities.
This follows ED’s searches at three premises in Bengaluru in April in the case involving founder Byju Raveendran and his company under the provisions of FEMA. At that time, the ED asserted that it had seized various incriminating documents and digital data.
During the searches in April, ED sources revealed that Byju's received foreign direct investment (FDI) of around ₹28,000 crore between 2011 and 2023. The company remitted around ₹9,754 crore to foreign jurisdictions during the same period in the name of overseas direct investment, added sources.
The firm took to its official X handle to convey that it had not received any such communication. “Byju's unequivocally denies media reports that insinuate Byju's of any FEMA violation. The company has not received any such communication from authorities,” the statement said.
This denial comes when Byju’s is confronting financial challenges as evident from its recent disclosure of ₹2,250 crore loss amid an escalating debt dispute. The crisis has also prompted a shift in strategy for the edtech giant, raising concerns within the industry.
The ₹9,000 crore penalty, if enforced, could have far-reaching consequences for Byju’s, one of India’s prominent edtech players. Industry analysts are closely monitoring the situation, anticipating potential ripple effects on the company’s financial standing and market perception.
The ED notice is the latest development in the unravelling of what was India's most valued start-up at one time. Byju Raveendran and his wife Divya Gokulnath set up Think and Learn Private Ltd, Byju’s parent company, in 2011. They initially offered online learning programmes for competitive exams.
However, the big breakthrough came in 2015 when the company launched Byju's learning app, their first step in what became a steep growth curve. Two years later, they launched a math app for children and another to help parents track their kids’ progress. By 2018, Byju’s had over 1.5 crore users. The app’s popularity got a massive boost during the COVID-19 pandemic when schools shut and children had to switch to online mode of learning.