“Byju’s Founder Restricted from Traveling Amid Company’s Crisis : Sources”
In another setback for the embattled edtech giant Byju’s, its founder Byju Raveendran has been barred from leaving the country by the Enforcement Directorate (ED). The central agency has issued a lookout circular against the entrepreneur, marking a new chapter in the challenges facing the once-prominent startup.
In another setback for the embattled edtech giant Byju’s, its founder Byju Raveendran has been barred from leaving the country by the Enforcement Directorate (ED). The central agency has issued a lookout circular against the entrepreneur, marking a new chapter in the challenges facing the once-prominent startup.
The edtech firm, once hailed as a beacon of India’s burgeoning startup ecosystem with a valuation exceeding $20 billion, has seen a dramatic downturn in its fortunes. Amid massive losses and a significant dip in valuation by about 90% last year, Byju’s has been grappling with a myriad of issues, including the resignation of key investors and a legal dispute with lenders in the United States over a $1.2 billion loan.
Raveendran, a former engineer who experienced a meteoric rise with Byju’s, now finds himself under scrutiny for the company’s faltering performance. A group of shareholders has called for an extraordinary general meeting (EGM) to discuss Raveendran’s ousting and the appointment of a new board. However, a Karnataka High Court order has temporarily halted any decisions made at the meeting until further proceedings.
Despite the legal setback, sources within the investor community indicate a continued push for Raveendran’s removal as CEO, emphasizing the severity of the challenges facing Byju’s.
In response, a company spokesperson denounced the proposed EGM as invalid, citing procedural, contractual, and legal violations. The spokesperson reaffirmed the founders’ commitment to upholding the company’s integrity and adherence to established legal procedures.
Byju’s, backed by heavyweight investors such as Prosus, General Atlantic, and the Chan Zuckerberg Initiative, has seen a rapid rise since its inception in 2006. Initially focusing on MBA aspirants, the company expanded its offerings to cater to undergraduate and school students, launching the Byju’s learning app in 2015. The Covid-19 pandemic fueled further growth as schools shifted to online teaching, but allegations of a toxic work environment and aggressive marketing practices began to tarnish its reputation.
Amidst financial woes and regulatory scrutiny, Byju’s faces allegations of financial mismanagement and violations under the Foreign Exchange Management Act, with showcause notices issued by the ED to its parent company, Think & Learn, amounting to over ₹9,362 crore.
As Byju’s navigates through this tumultuous period, its founder’s travel restrictions underscore the depth of the company’s crisis, signaling a pivotal moment in its journey from rapid ascent to uncertain terrain.
Sources By Agencies
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