Byju’s, an Indian Ed-Tech startup once valued at $22 billion, faces insolvency; employees anxious

Byju’s, once a prominent figure in India’s EdTech startup sector, is now facing insolvency and a severe financial crisis, raising concerns about its future and that of its employees.

Once valued at $22 billion in 2022, the company saw rapid growth by offering online courses during the COVID-19 pandemic. However, it’s now embroiled in a legal battle with U.S. lenders over $1 billion in unpaid dues, leading to insolvency fears.

This situation marks a significant downturn for both Byju’s and the broader Indian startup ecosystem, with thousands of employees grappling with uncertainty as they seek unpaid wages and secure their careers.

In less than a year, Byju’s valuation plummeted from $22 billion to under $3 billion, as investment giant Prosus NV slashed its estimate by 86%. This dramatic drop reflects growing concerns about Byju’s business model and its ability to sustain its previous growth, which has been marred by governance issues and financial difficulties.

Interviews conducted by Reuters with employees, parents, and a review of WhatsApp messages reveal a deepening sense of urgency among those affected. Many employees, including Sukirti Mishra, 29, have stopped working, citing a lack of payment for months. Mishra, who previously earned $1,200 a month teaching math, now faces the frustration of parents after halting classes. She is also struggling to cover medical bills and loan installments due to her unpaid salary, Reuters reported.

“A lot of people, including myself, have stopped taking classes because there’s no point doing charity for the company anymore,” Sukirti Mishra, 29, shared during a conference call with Reuters that included about 60 employees from Byju’s unit WhiteHat Jr.

Byju’s has remained silent in response to Reuters’ inquiries. However, court documents indicate the company is fighting the insolvency in court, warning of a potential complete shutdown of services if the process continues.

India’s Supreme Court recently refused Byju’s request to halt the insolvency proceedings, leaving the company in a precarious position. With three months of unpaid wages, many of Byju’s 27,000 employees are contemplating legal action or street protests. Around 3,000 of them have already submitted claims, backed by bank statements, according to a senior executive who chose to remain anonymous.

Founded in 2011 by Byju Raveendran and Divya Gokulnath, Byju’s rose to prominence by offering educational solutions to over 150 million students worldwide. Its growth was fueled by ambitious expansion efforts and a focus on attracting a large base of paying subscribers. However, questions about the sustainability of this aggressive strategy have come to the forefront. Reports of declining enrollment, mounting losses, and high customer churn have cast doubt on Byju’s ability to generate stable revenue.

As Byju’s navigates these challenges, the future remains uncertain. The company must address its operational shortcomings, enhance profitability, and regain the trust of investors and stakeholders if it hopes to recover its previous standing in the EdTech sector.