The Future of Byju's: A Bold Prediction

Many of Byju's 27,000 workers are considering filing lawsuits or staging street protests after three months without pay. Approximately 3,000 have submitted claims since a court-appointed administrator took over the company, citing bank statements as evidence, according to a senior corporate executive who spoke on the phone without identifying himself. Byjus is reportedly running out of money, and investors are trying to get involved and seize control of the company. Byju's has eliminated around 5,000 positions to extend its lifespan since 2022. According to the CEO of the ed-tech startup, Byju's, the company will probably have to fire hundreds of workers and shut down all of its operations due to filing for bankruptcy. With a $22 billion valuation, Byju's was once the most prominent startup in India and was supported by Prosus and General Atlantic.

Was Byju’s a worthwhile investment?

The learning app Byju is a fantastic offering. Because teachers in schools are not teaching according to the standards of the late 2000s, it was an excellent learning opportunity if applied with sincerity and dedication.

Is Byju’s struggling?

It gained fame during the COVID-19 pandemic by providing online training classes, but it is currently embroiled in a legal battle with US lenders chasing $1 billion in overdue payments. Its bankruptcy raises the possibility of being the most significant shock in the renowned startup industry.

Can Byju’s bounce back?

If anything, with the introduction of BYJU'S 3.0, BYJU'S is undergoing yet another change. This result comes simultaneously as the company's $200 million rights issue, delayed by legal disputes with confident investors in its investor group, has received shareholder approval.

Is Shah Rukh Khan a Byju's investor?

Shah Rukh Khan was signed by Byju's in 2017 for an annual salary of about Rs 4 crore. The Shah Rukh team is likewise apprehensive about maintaining the relationship with the company.

Getting Through The Insolvency Storm

The fact that any revenue booked by Byju's at this stage of the year can only be recorded in the following year exacerbates the situation. The edtech courses that are now on sale are for FY26. Since the sales cycle for FY25 ended around May 2024, most businesses are currently focussing on the upcoming class of students. The creator of an edtech business with an offline presence says, "This means revenue can only be recognised for the next year, even if sales are completed at this point."

Byju's: Bold Prediction

For Byju's, this is an existential crisis. The edtech behemoth has crashed, and it's more than just an issue of finding money to extend the runway and keep the firm alive. It went from being hailed as the poster child of the Indian startup ecosystem to a cautionary tale about what not to do.

As we've seen over the past year—since three directors and an auditor abruptly left the company—the current problem stems from a string of poor choices by Byju Raveendran and the management over time. In addition to Raveendran and cofounder Divya Gokulnath, many international capital and venture capital funds invested in the massive edtech company also need to reflect on what went wrong.

The recent Supreme Court hearing has left the future of Byju's needs to be clarified. Once there is more clarity in the case, we can assume the fate of Byju's. The court granted Byju's a hold on some portions of the process but also let the insolvency proceedings proceed. This implies that the business has some flexibility to bargain with its creditors and posbsibly reorganise its debt. We hope Byju's bounces back.