The $22 Billion Question
In 2022, BYJU'S was the world's most valuable EdTech company. It sponsored the FIFA World Cup and the Indian Cricket Team. Investors like Sequoia, Chan-Zuckerberg, and BlackRock poured billions into Byju Raveendran's vision.
Two years later, the valuation collapsed to effectively zero.
This isn't just a story of market failure. It is a case study in Corporate Governance, Aggressive Accounting, and the "Growth at All Costs" fallacy. How did a math teacher from Kerala build an empire, and why did it crumble?
The Valuation Rollercoaster
The Debt Trap: Term Loan B
To fund massive acquisitions like Aakash and WhiteHat Jr, BYJU'S took a $1.2 Billion loan from US institutional lenders. This "Term Loan B" became the noose around its neck when interest rates rose and governance issues surfaced.
Where Did the Money Go? (Acquisitions)
- Aakash (Test Prep) $950 Million
- Great Learning (Higher Ed) $600 Million
- Epic! (US Reading) $500 Million
- WhiteHat Jr (Coding) $300 Million
- Total Spent ~$2.5 Billion
Revenue vs. Losses (FY21-22)
Note: 22-month delay in filing FY22 financials caused auditor resignation.
Boardroom Decision Simulator
You are on the Board in 2021. The market is hot. Cash is cheap. What do you do?
Decision 1: The Aakash Acquisition
Aakash Institute is a profitable offline giant. Acquiring it costs $1 Billion (mostly cash). It gives you a "Phygital" moat but drains your reserves.
Decision 2: Audit Transparency
Deloitte (Auditor) is asking for "Revenue Recognition" changes. If you agree, revenue drops 40% optically. If you delay, you keep the valuation high for the next fundraise.
Classroom Discussion
The Agency Problem
Why did the board (Investors) allow the founders to make such aggressive acquisitions without tighter financial controls?
Valuation vs. Value
Discuss "The Greater Fool Theory" in startups. Was the $22B valuation ever real, or a construct of cheap capital?
Ethics in EdTech
Did the aggressive sales culture (pushing loans to poor parents) ultimately destroy the brand's trust capital?