Byju Raveendran, founder of the edtech giant Byju’s, disclosed on Thursday that his company, once valued at $22 billion, has now effectively become “worth zero.” He attributed the downfall to a series of mistakes, including mistimed market predictions and overestimated growth potential, exacerbated by an aggressive acquisition strategy that backfired when financing dried up in 2022.
Raveendran explained that Byju’s acquisition spree, which involved more than two dozen startups, aimed at expanding into new markets. However, the plan collapsed after the venture capital market took a downturn following Russia’s invasion of Ukraine. Despite initially planning to take the company public in 2022, with valuations expected to soar as high as $50 billion, the deteriorating market conditions halted these ambitions.
He noted that his investors had initially encouraged this aggressive expansion into 40 markets. Yet, when the global market faltered, many of these investors retracted their support. Raveendran pointed out that the exit of three key backers — Prosus Ventures, Peak XV, and the Chan Zuckerberg Initiative — as well as auditor Deloitte from the board, further destabilized the startup. These departures, citing governance issues, ultimately made it impossible for Byju’s to secure additional funding.
The company, which has since entered insolvency proceedings, saw Raveendran relinquish control, stating: “It’s worth zero. What valuation are you talking about? It’s worth zero.”
Once hailed as India’s most valuable startup, Byju’s attracted significant backing from major investors such as BlackRock, UBS, Lightspeed, QIA, and the World Bank’s IFC, among others. Over $5 billion had been raised to fuel its growth.
Despite the collapse, Raveendran expressed hope for a future comeback, stating, “I have nothing to lose. I came from a small village. I invested everything I had into the startup.”
Featured Image courtesy of TechCrunch
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