Raveendran blames investors, plans new edtech venture

Byju Raveendran, the co-founder and CEO of the now-bankrupt edtech giant Byju's, announced his intention to launch a new edtech venture, which he promises to run “at half the cost”. Speaking from Dubai, where he resides during his court trials, Raveendran emphasized his commitment to the edtech sector and expressed optimism about rebounding in a new form.

In a candid call with journalists on Thursday, Raveendran attributed the downfall of Byju's partly to its investors. He argued that these investors had aggressively supported the company’s expansion and acquisitions but deserted it at the first sign of trouble.

“Since the markets turned in December 2021, the only people who have been putting money into the company are us,” he stated. Raveendran also criticized investors for prioritizing financial goals over the needs of students and parents, pushing for the creation of a $100-billion company without regard for long-term stability.

Court Disputes and Investor Fallout

Earlier this year, key investors such as Sofina, Peak XV, Prosus, and General Atlantic sought to remove Raveendran from his position, citing mismanagement and oppression of minority rights. This led to the company being admitted into bankruptcy. Despite these challenges, Raveendran remains resolute, denying claims that he fled to Dubai and explaining his move was for his father's medical treatment.

Personal and Professional Reflections

Raveendran shared insights into his personal life, revealing that he recently welcomed a baby girl. Professionally, he expressed enthusiasm about returning to teaching, claiming his unique ability to change students' perspectives on learning within minutes.

Shared Decisions and Missteps

According to Raveendran, all major decisions at Byju's were made collectively with investor approval. He cited Whitehat Jr. as the acquisition that received the most support and noted the board’s resistance to acquiring Aakash Educational Services, which has since become a valuable asset among Byju's 26 acquisitions.

Reflecting on the company's rapid expansion, Raveendran admitted to overestimating potential growth and mistiming the market. He acknowledged that these factors, along with significant debt, contributed to Byju's downfall.

Financial Struggles and Litigation

Byju’s is currently embroiled in multiple litigations from lenders and investors, including a demand for repayment of a $1.2-billion loan taken in November 2021. Investors are also seeking to protect their rights in Byju’s parent entity, Think & Learn Pvt. Ltd., while some, like the Qatar Investment Authority, have requested court intervention to assess Raveendran’s personal assets.

Despite these setbacks, Raveendran claimed that Byju's subsidiaries, including Aakash Education Services and Great Learning, continue to generate significant revenue, collectively reporting ₹5,500 crore in annual recurring revenue. However, the core business itself has halted, with Raveendran admitting that current revenues are non-existent.

Missing Funds and Auditor Resignations

Addressing the contentious $533 million, Raveendran explained that the funds were allocated as a guarantee for future expenses, making them inaccessible to Term Loan B (TLB) lenders. This statement aligns with a recent US court filing reversing the company’s earlier claim that the money was safely held overseas.

Raveendran also addressed the resignation of Byju's auditors, Deloitte Touche Tohmatsu India, and BDO. He refuted allegations of obstructing the audit process, asserting that the decision to limit Deloitte’s access was due to their prolonged auditing timeline. He described this as a collective and conscious decision by the company.

Future Prospects

Despite the tumultuous period, Raveendran remains optimistic about his future in the edtech industry, vowing to find new ways to continue teaching and innovating in the sector.