A government agency called the Enforcement Directorate has sent a notice to Byju’s, a big company that makes educational apps. The notice says that Byju’s broke the rules about how much money foreign companies can invest in Indian companies. The government agency says that Byju’s owes them 9,000 crore rupees, which is a lot of money. Byju’s says that they didn’t break any rules and that they haven’t even heard from the government agency.
As per ED insiders, Byju’s reportedly received Foreign Direct Investment (FDI) totaling around ₹28,000 crore between 2011 and 2023. Allegedly, during the same period, the edtech major remitted approximately ₹9,754 crore to foreign jurisdictions in the guise of overseas direct investment.
Byju’s, taking to its official communication platform, X handle, vehemently denied the allegations. The company’s statement declared, “Byju’s unequivocally denies media reports that insinuate Byju’s of any FEMA violation. The company has not received any such communication from authorities.”
This notice from the ED marks the latest chapter in the unfolding saga of what was once India’s most valued startup.
Founded in 2011 by engineers and educators Byju Raveendran and Divya Gokulnath, Byju’s parent company, Think and Learn Private Limited, initially offered online learning programs for competitive exams. The pivotal turning point came in 2015 with the launch of Byju’s learning app, catalyzing a steep growth trajectory. By 2018, the platform boasted over 1.5 crore users, extending its reach to millions of households in small cities and rural areas. The app’s popularity skyrocketed during the Covid-19 pandemic, as schools closed, and digital education became the norm.
However, the tide began to turn. After a substantial loss in 2021, Byju’s witnessed a gradual decline in its valuation. Subsequently, it attracted the attention of law enforcement agencies. The latest financial results for Think & Learn Pvt., Byju’s parent company, revealed a marginal narrowing of losses amid a boom in business during the pandemic. The firm posted an operational loss of 22.5 billion rupees ($271 million) in the fiscal year ending March 2022, compared to a 24 billion rupees loss the previous year. Total income for the firm more than doubled to 35.7 billion rupees.
This downturn sheds light on Byju’s struggle to rebound from a post-Covid slump. The company faced legal challenges as creditors sued over a breached $1.2 billion loan covenant. Byju’s used to be a very successful company, but now they’re having a lot of problems. They bought too many other companies too quickly, and now they’re paying the price.
Compounding the issues are serious allegations surrounding Byju’s operations. Parents have been complaining that Byju’s tricked them into buying expensive courses and then didn’t keep their promises. Byju’s has also been accused of treating its employees poorly and has made the news for laying off a lot of people to save money.
Earlier this year, the ED conducted a raid on Byju’s office in Bengaluru, suspecting violations of laws governing foreign funding. Byju’s used to be a great example of how successful a startup could be in India, but now it’s facing a lot of problems. This is a big challenge for the company.