Byju’s in hot water

THIS Icarus is no son of an inventor, but of two village schoolteachers. Yet, he flew high, creating India’s top unicorn, once valued at $22 billion. He brought in one of the world’s greatest football icons, Lionel Messi, as the global brand ambassador of his company. He sponsored the Indian cricket team and was an official funder of FIFA World Cup 2022. He is Byju Raveendran, and he is the brand — Byju’s. The edtech company that he founded in 2011 launched a learning application in 2015, and in no time it had 1.5 million subscribers and a valuation of $1 billion in 2018. The Covid pandemic made him the superhero of virtual learning, leading to a Harvard Business School case study.

There cannot be a bigger rollercoaster ride than that of Byju’s. The valuation of his company has nosedived 99 per cent from $22 billion to $200-225 million in less than three years, leaving desperate investors clutching at straws to save their huge investments. His investors Prosus, General Atlantic, Sofina and Peak XV Partners and shareholders like Tiger Global and Owl Ventures came together last week to hold an Extraordinary General Meeting in a bid to oust Raveendran as Chief Executive Officer and also ease his wife and brother out of the board. All this happened within hours of the top four investors moving the Bengaluru bench of the National Company Law Tribunal to get the founding family declared unfit to run the company. Raveendran has countered that he continues to be at the helm of the troubled firm.

Meanwhile, the ED is investigating alleged violation of the Foreign Exchange Management Act by Byju’s to the tune of Rs 9,362.35 crore. This Icarus surely flew too close to the sun on wings of false valuation. The Byju’s story is of soaring greed — of founders and investors who bend business models to inflate valuations without revenue streams or real value.

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#Football #Lionel Messi