Byju Raveendran’s net worth falls from $2.1 bn to zero

Byju Raveendran, who's the founder of ed-tech major BYJU's, has seen his net worth fall from $2.1 billion a year ago to zero, according to the latest Bloomberg Billionaire Index 2024.

The poster boy of the Indian startup scene, whose ed-tech platform BYJU's, rose to its prominence, hitting $22 billion valuation in 2022, has been caught up in controversies over foreign funding, fund crunch, layoffs and legal tangles with foreign investors.

Launched in 2011, BYJU's revolutionised India's ed-tech sector by becoming a one-stop destination for online education as it offered classes for students from primary school to MBA. The start-up received an overwhelming response as people were restricted to their homes amid the pandemic in 2019-20. But the success was short-lived as the recent financial disclosures and controversies have dented its reputation massively.

Additionally, BYJU’s went overboard on acquisitions over the past couple of years, helped by heavy investor funding to the tune of over $2 billion since the start of the pandemic. When that stopped -- followed by the funding winter in 2023 -- it resorted to layoffs, shedding over 10,000 employees in the past two years alone. In August 2022, BYJU's had 50,000 employees, now its India team has reduced to 14,000. This week alone, BYJU's laid off around 500 employees amid the founders' tussle with four foreign investors -- Prosus, Peak XV Partners, General Atlantic, and Chan-Zuckerberg Initiative. These investors had secured an interim order from the court in late February 2024, which restricted the usage of the funds raised through its $220 million rights issue.

BYJU's statutory auditor Deloitte Haskins & Sells also quit last year, citing a long delay in the ed-tech startup's financial statements for the year ended March 31, 2022. Following the auditor's resignation, Byju's appointed BDO (MSKA & Associates) as its new auditor.

These controversies led to massive erosion in BYJU's valuation. In January this year, U.S.-based asset manager BlackRock slashed the valuation of the Indian startup by 95% to $1 billion. BYJU's had floated a $200 million rights issue in January 2024 at an enterprise valuation of $220-250 million, which was a whopping 99% decline from 2022 when the company was valued at $22 billion. The losses of the ed-tech startup are also ballooning. The net loss widened manifold to ₹8,245 crore for FY22 vs ₹4,564 crore in FY21.

In November last year, the company was also issued a show-cause notice by the ED under FEMA (Foreign Exchange Management Act, 1999) violations worth over ₹9,000 crore. The probe in the case is still on.

Amid the ongoing tussle with investors, CEO Byju Raveendran in February 2024 had promised he would restructure the board and appoint two non-executive directors. The three board members of BYJU's Byju Raveendran, his wife Divya Gokulnath and brother Riju Raveendran currently hold around 26% stake in the company. Raveendran claims he has personally invested $1.1 billion in BYJU's over the last two years to pay salaries and maintain operations.