In 2015, a young engineer from Kerala launched the Byju’s app with the aim of reducing the academic pressure faced by students in India. The app grew rapidly, with the entire country watching its meteoric rise. However, the collapse that followed was just as swift as its growth. Let’s take a look at Byju’s journey.
Byju’s entered the market with the ambitious goal of making math and science fun to learn. With Bollywood superstar Shah Rukh Khan and football legend Lionel Messi as brand ambassadors, the company took advantage of the online learning boom during the COVID-19 pandemic, transforming itself into a $3 billion business. Just 15 months ago, Byju’s had a valuation of $22 billion.
However, instead of prioritizing education and technology, Byju Raveendran focused on aggressive marketing. The company transitioned into a system where everyone who downloaded Byju’s — The Learning App was pushed to purchase courses. Today, one of its key investors, Prosus NV, has slashed Byju’s valuation to under $3 billion. Prosus NV, Peak XV, and the Chan Zuckerberg Initiative, all early investors, have stepped down from Byju’s board.
Creditors have now seized Byju’s US subsidiary due to an inability to repay a $1.2 billion loan. The company is facing a severe financial crisis, with mass layoffs and significant losses. The startup’s founder, Byju Raveendran, even had to sell his own home to pay salaries. The Board of Control for Cricket in India (BCCI) has filed an insolvency petition over unpaid sponsorship dues.
Why did things go wrong so quickly? According to The Learning Trap, a book by Morning Context journalist Pradip Saha, the same aggressive sales tactics that propelled Byju’s rapid growth also contributed to its downfall.
The book includes interviews with current and former employees of Byju’s.
One of the harshest criticisms against Byju’s was about the extreme work pressure faced by employees. They reported working 12-14 hours a day, six days a week. The book describes instances where employees were forced to work even when they were sick, and subjected to verbal abuse from their supervisors.
Byju’s courses were often sold with a "buy now, refund later" approach. Even low-income families had to pay around $600 for long-term courses. Over time, many financial partners began realizing that this model was unsustainable. However, Byju’s dismissed the allegations, claiming that these were isolated incidents rather than systemic failures.
