INSUBCONTINENT EXCLUSIVE:
His formerly high-flying company was eventually brought low when it could not pay $19 million in sponsorship dues to India's cricket
federation | Photo: Bloomberg4 min read Last Updated : Jul 22 2024 | 9:44 AM IST
Byju Raveendran, an Indian mathematics whiz who soared
from teacher to startup billionaire before his education-technology company imploded this year, now faces his biggest test.
The future of
Raveendran's eponymous Byju's online coaching firm rests with India's courts after the county's biggest startup, once loved by global
investors who valued it at $22 billion, crashed below $2 billion in valuation
The 44-year-old founder last week lost control of the company as a tribunal kick-started an insolvency process.
Accused of "financial
mismanagement and compliance issues", the son of a family of teachers from a small village in south India faces a reckoning that will test
the ingenuity that made him a poster child for India's startups.
His formerly high-flying company was eventually brought low when it could
not pay $19 million in sponsorship dues to India's cricket federation, prompting a tribunal to suspend Byju's board and make Raveendran
report to a court-appointed restructuring expert.
An appeals tribunal is expected to hold a hearing on Monday on whether Byju's insolvency
process should be quashed after the former billionaire argued in court his company is solvent and that insolvency could shut it down and
cost the jobs of 27,000 staff, including teachers
Insolvency also would not bode well for Byju's backers, such as Dutch technology investor Prosus.
Raveendran denies the allegations of
mismanagement and wrongdoing at his firm, which has in recent months faced lawsuits over unpaid loans and boardroom battles with foreign
investors that went public.
Potential insolvency is a dramatic turn of events for an entrepreneur described by one person who has worked
with him as an extremely passionate and goal-oriented person who might adopt "an abrasive approach" in a crisis.
Raveendran presented a
"suave, nice and polished" image, appearing to heed advice, but "eventually there was a trust deficit", said another executive who quit last
year as a Byju's senior vice president.
"He said things are improving, don't worry, we have the money," the former executive
said.
Raveendran and a Byju's spokesperson did not respond to requests for comment.Byju's downfall: 'Our fair share of mistakes'
An
engineer by training, he started Byju's in 2011 with physical classes after friends urged him to go into teaching.
Raveendran, who aced a
premier Indian management exam "with a score of 100 percentile, not once but twice", according to the company website, started what would
become his empire with his wife Divya Gokulnath, 38, a former student of his.
In education-obsessed India, Raveendran hit gold by offering
online teaching programs priced from $100 to $300
He got a mammoth boost when the Covid-19 pandemic sent students indoors
At the height of his fame in 2021, he and his wife had a net worth of $4 billion, Forbes reckoned.
Now all that is in tatters.
Behind
the reversal of Byju's meteoric success, say executives and advisers who worked with Raveendran, is that he overruled associates and
expanded the business through expensive acquisitions, splurging on marketing and being slow to address problems such as sales agents
adopting aggressive tactics to mis-sell courses that damaged the company's reputation.
With the backing of investors like General
Atlantic, Prosus and Facebook founder Mark Zuckerberg's philanthropy venture, Raveendran spent millions on acquisitions, and the company
says it has 150 million students in over 100 countries.
"While growing fast, as I've accepted multiple times, we've made our fair share of
mistakes", Raveendran told an interviewer last year at the World Economic Forum in Davos.
As he battled crises, the CEO also said
decisions to lay off some of its then-50,000 employees and slash branding expenses would help strengthen loss-making Byju's and turn its
cashflow positive.
"Every country needs a Byju's," he said.First Published: Jul 22 2024 | 8:01 AMIST
