On Tuesday, Indian edtech firm Byju's faced potential insolvency proceedings due to a tribunal's order, exacerbating the crisis that has seen the once-dominant player's valuation plummet from approximately $22 billion to under $2 billion.
The insolvency was triggered when the Indian cricket board sought tribunal intervention last year against Byju's for failing to pay $19 million in dues related to sponsorship rights for the national cricket team's jerseys. Byju's expressed a desire to resolve the issue, but the tribunal sided with the cricket board and appointed a resolution professional, suspending Byju's board of directors.
Investor tensions escalated in February when a consortium, including tech investor Prosus, accused Byju's of "financial mismanagement and compliance issues" and demanded the ouster of founder and CEO Byju Raveendran, along with a board overhaul. Byju's refuted the mismanagement claims, asserting that the investors lacked the authority to remove its CEO. Prosus further wrote off the value of its 9.6% stake in Byju's in June, marking the first complete write-off by an investor in the struggling startup.
Auditor Deloitte resigned last year, citing delays in Byju's financial statements and the non-receipt of necessary documents despite multiple correspondences. Concurrently, three board members representing investors Peak XV Partners, Prosus, and Chan Zuckerberg Initiative resigned.
Byju's claims to be the "world's largest education technology company," offering online tutorials for subjects like math, physics, and chemistry to school students. The company experienced significant growth during the COVID-19 pandemic, with its valuation soaring from $5 billion pre-pandemic to $22 billion in 2022, accompanied by several acquisitions.
Founded and led by Byju Raveendran and his wife, Divya Gokulnath, Byju's began as a mathematics tutoring service for friends, evolving into a substantial business as its popularity surged. Raveendran, an engineer whose parents were teachers, launched Byju's in 2011 and its app in 2015.
