With raids back home, Byju’s Raveendran broke down taking calls from investors in Dubai
For months, Byju’s founder Raveendran has been in a state of distress. His formerly successful tutoring firm Byju’s missed the deadline for filing its financial statements, in addition to the raid by India’s financial crime-fighting agency. Several investors headquartered in the US charged Byju’s with concealing half a billion dollars, prompting lawsuits.
In late April, Indian officials had raided the Bengaluru offices of Byju’s, seizing laptops and publicly linking the world’s most valuable education-technology startup with possible foreign exchange violations.
At that time, Raveendran was fielding calls from top investors in Dubai. With a planned $1 billion equity fundraise from Middle Eastern investors still in limbo, Raveendran broke down in tears defending his company, according to people who attended the calls.
Inaccuracies are attributed by Raveendran’s supporters to the passion and naiveté of an untried founder who expanded too hastily.
A $1 billion equity investment from Middle Eastern backers is what Raveendran is relying on and it may happen as soon as next month. In order to get by during the economic crunch, he is now turning to some of his early donors in India.
People tracking the negotiations who didn’t want to be identified because the talks are secret said that if the money comes through, Byju’s may pay off creditors and buy out the rebellious US-based investors.
Lenders also concurred earlier this week to work on modifying the $1.2 billion debt by August 3.
Raveendran was raised in a village in the Keralan coastal region and went to a local school where his mother taught math and his father taught physics. People who knew him at the time said he was an unusual student, skipping class to play football and preferring to learn on his own time at home.
After a brief stint as an engineer, Raveendran started teaching students at a Bengaluru college. Every week, enrollment doubled, and Raveendran eventually moved the classes into a stadium. For thousands of students, lessons were shown on enormous screens.
In India, where qualified teachers are hard to find and educational practices are outmoded, Raveendran’s methods stood out. He was skilled at assisting pupils in preparation for the extremely difficult admission exams for prestigious engineering and medical universities.
Global investors, such as Sequoia Capital, Blackstone Inc., and Mark Zuckerberg’s foundation, were enthralled by Raveendran’s climb from a private instructor to the head of a $22 billion firm. Raveendran dominated the Indian ed-tech business during the Covid epidemic.
However, as the schools resumed, questions regarding Byju’s financial situation hurt the company’s standing. Investors questioned Raveendran’s decision to purchase more than a dozen businesses quickly around the world while delaying the employment of a chief financial officer for years. Numerous workers have either quit or been dismissed. Members of the board have left. Additionally, several classrooms are almost vacant.
