Here's how the world's most valuable learning app Byju's became a trap

In 2015, a young engineer from Kerala in south India came up with an ambitious plan to take math and science online and make it fun for the country’s stressed teenagers. But instead of remaining focused on education and technology, Byju Raveendran appended a gigantic sales machine to his edutech — with Bollywood superstar Shah Rukh Khan and soccer legend Lionel Messi as his brand ambassadors, and an army of reps hustling to sell courses to anyone downloading Byju’s — The Learning App. 

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And then, with the help of cheap, over-eager venture capital, he turned his eponymous organisation into an acquisitions juggernaut, spending nearly $3 billion globally during the pandemic-era craze for remote learning.

The result has been nothing short of disastrous. Just 15 months ago, the startup was worth $22 billion. Now one of its main investors has cut Byju’s valuation to under $3 billion. Prosus NV — as well as two other early backers, Peak XV and the Chan Zuckerberg Initiative — have quit the edutech’s board. Creditors have taken control of Byju’s Alpha, a US financing vehicle, over an unpaid $1.2 billion term loan.

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The group is facing an acute liquidity crunch. Amid mass layoffs and deep losses, the former billionaire founder has sold his homes to pay salaries. Still, Raveendran is not entirely out of options. Byju’s could raise funds by selling Epic!, its US-based kids’ digital reading platform. At home, its physical test-prep business has seen interest from a wealthy Indian investor. In a sale or initial public offering of the unit, the crown jewel of the shrinking empire could fetch more than the nearly $1 billion Byju’s had paid for it in 2021.

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