Byju Raveendran, the founder of the edtech giant BYJU’S, has publicly acknowledged that the company made “some business mistakes” during its aggressive global expansion. As reported by ANI, Raveendran stated that the rapid foray into 21 countries was largely driven by a “mandate” from its world-class investors.
Fast expansion backfired
Raveendran said, “When we tried expanding from India to the whole world, we made some business mistakes. Maybe we could have taken it a little bit slowly. We were growing a little too soon, too fast. We went from India to 21 new countries.” He explained that during the COVID-19 pandemic era (2019-2021), the company’s 160 investors, including prominent equity firms, urged the company to “grow, grow, grow and change the way kids learn.”
Raveendran, whose company once held the prestigious title of the country’s most valuable edtech with a peak valuation of approximately USD 22 billion in 2022, also attributed the company’s current struggles to “external macro reasons.” He specifically cited the Russia-Ukraine war as a key factor that led to the drying up of significant investments that had been promised.
“We were raising money for growth at that time. But when the world changed, when interest rates went up, when the Fed increased the interest rate, and almost simultaneously, the big war started, Russia and Ukraine, suddenly the liquidity dried up. 700 million of committed capital; signed committed capital didn’t turn up,” he revealed.
Byju’s plans
The founder asserted that BYJU’S had been actively planning acquisitions and further growth based on the expectation of these funds. He further conceded that the edtech firm has been grappling with liquidity issues for nearly three years.
“So we were planning all these acquisitions and growth, assuming that all this money is coming. In fact, this was signed documents. There was no litigation. We didn’t go and litigate those investors who backed out because of these external macro reasons. And from then onwards, and this is early 2022, and it’s almost now three years, we have been struggling for liquidity. But fortunately, we had enough liquidity, which we made, and I have no regrets in terms of putting all that money back,” Raveendran stated.
Launched in 2015, BYJU’S quickly rose to prominence, catering to students from kindergarten to class 12. The company achieved “Unicorn” status by 2019, reaching a valuation of over USD 1 billion, and further soared to a USD 22 billion valuation in 2022.
However, the company’s fortunes have seen a downturn. In June 2024, Prosus, a global investment firm focused on technology companies, significantly slashed BYJU’S valuation by a staggering 75 percent, highlighting the challenges the once-leading edtech firm is currently facing. Raveendran’s recent admissions shed light on the factors contributing to this dramatic shift.
(With ANI Inputs)