Byju’s Founder Byju Raveendran Barred from Traveling Abroad

In a significant development for the renowned edtech company Byju's, its founder Byju Raveendran has been prohibited from leaving the country by the Enforcement Directorate, which has placed a lookout circular against the entrepreneur. The move follows a period of financial difficulties for Byju’s, which experienced a sharp decline in valuation alongside the exit of key investors and the resignation of its auditor, Deloitte.

Byju’s, once valued at over $20 billion and a prominent figure in India’s startup landscape, faced considerable challenges over the past year, leading to approximately a 90% decrease in its value. The company is currently embroiled in a legal dispute with creditors in the United States over a substantial $1.2 billion loan.

Byju Raveendran, the former engineer who spearheaded the company’s meteoric ascent, has been the subject of criticism amidst Byju’s recent struggles. Shareholders have called for an extraordinary general meeting to potentially remove Raveendran from his position and appoint a new board, although a recent Karnataka High Court ruling has placed a temporary hold on any decisions made at the meeting.

Despite claims from Byju’s that the meeting is a tactic aimed at disrupting the company’s operations, investors are reportedly determined to pursue leadership changes. Notable backers of Byju’s include tech investment powerhouse Prosus, General Atlantic, and the Chan Zuckerberg Initiative founded by Facebook‘s Mark Zuckerberg and Priscilla Chan, with representatives from these organizations stepping down from Byju’s board in the past year.

Established in 2006, Byju’s initially focused on providing coaching for MBA entrance exams before expanding into other educational segments. The company’s learning app, launched in 2015, facilitated its transition into a unicorn in the edtech space. However, challenges arose following allegations of a hostile work environment and aggressive marketing practices.

As Byju’s faced setbacks such as a significant revaluation by Prosus, it resorted to cost-cutting measures, including layoffs and accusations of financial irregularities. The company’s extensive sponsorship deals, which included partnerships with prominent sporting entities and personalities like Lionel Messi, contributed to its financial strain as growth decelerated.

Byju Raveendran’s resorting to leveraging personal assets last year to secure loans for staff salaries underscored the severity of Byju’s predicament. In addition to the travel restrictions imposed on Raveendran, Byju’s parent company, Think & Learn, has been served showcause notices by the Enforcement Directorate over alleged breaches amounting to over Rs 9,362 crore under the Foreign Exchange Management Act.