Byju Raveendran, the founder of India’s edtech giant Byju’s, has experienced a significant decline in his fortunes, with his net worth plummeting from ₹17,545 crore ($2.1 billion) to zero, according to the recently released Forbes Billionaire Index 2024.
Once a prominent figure on prestigious ‘globe’s richest’ lists, Raveendran’s downfall reflects the challenges facing his once high-flying startup.
Byju’s Valuation and Rise to Prominence
Established in 2011, Byju’s swiftly ascended to become India’s most valuable startup, achieving a peak valuation of $22 billion in 2022. The company’s groundbreaking learning app transformed the education sector, catering to students from primary school to MBA aspirants. However, recent financial disclosures and controversies have tarnished its reputation and eroded its value.
Financial Challenges and Investor Concerns
Byju’s financial woes became apparent when the company released its long-awaited results for the fiscal year ending March 2022, revealing a staggering net loss exceeding $1 billion. This poor performance prompted BlackRock, a major investor, to drastically reduce its valuation of Byju’s to a mere $1 billion, a fraction of its peak valuation.
Leadership Changes and Regulatory Scrutiny
Amid the company’s struggles, Byju’s shareholders, including Prosus NV and Peak XV Partners, voted to remove Raveendran as CEO, citing growing concerns over the company’s direction. Additionally, Byju’s has come under scrutiny from the Enforcement Directorate over alleged violations worth over ₹9,362 crore under the Foreign Exchange Management Act, exacerbating its challenges.
Restructuring Efforts and Employee Layoffs
To address its financial challenges, Byju’s initiated a business restructuring exercise in October 2023 aimed at streamlining its operating structures, reducing costs, and improving cash flow management. This restructuring has resulted in the layoff of over 500 employees, with the company facing further departures due to delayed salary payments for the past three months.
In 2024, Forbes unveiled its annual World’s Billionaires list, featuring a record 2,781 billionaires with a combined net worth of $14.2 trillion. However, not all billionaires experienced a prosperous year, as a quarter of those on the list saw a decline in their fortunes compared to 2023. Additionally, 189 individuals fell below the $1 billion threshold, losing their billionaire status.
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