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5 September 2023

Key factors that contributed to the downfall of BYJU’s and what

lessons can be drawn from its decline?"

Introduction

BYJU Raveendran and Divya Gokulnath started BYJU’s in 2011. BYJU’s app-based learning

platform was well-liked by both parents and children, and the business garnered billions of

dollars in funding. The company was the most valuable EdTech company in the world in 2018

with a valuation of over $10 billion. BYJU’s has, however, experienced a number of difficulties

lately. The business recorded a $327 million loss in 2021. Additionally, the business has come

under fire for its methods of corporate governance. BYJU’s was charged with aggressive

accounting practices and revenue boosting in 2022. The business has also experienced a decline

in user satisfaction as a result of some consumers' complaints about the expensive products and

poor educational options. BYJU’s has changed a lot in 2023 in an effort to make things better.

The company has sold off several of its operations and let go of thousands of workers.

Additionally, BYJU’s is committed to enhancing its corporate governance procedures and

emphasizing client happiness. But it's still unclear whether these adjustments will be sufficient to

sustain the business.

Background of BYJU’s

BYJU’s, India’s top edtech company, was founded by Byju Raveendran, Divya Gokulnath and a

group of students in 2011. It is headquartered in Bangalore. As of April 2023, the company

claims to have over 150 million registered students and was valued at $22 billion in June 2023.
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BYJU’s is a free education tutoring application that provides educational content to students

from Classes 4 to 12. In 2019, the app was launched with an Early Learning program for Classes

1 to 3. BYJU’s offers free access to its content for a limited period of 15 days after registration.

The app trains students for various examinations in India such as IIT-JEE, NEET, CAT, IAS

GRE and international examinations (GMAT). Students learn academic subjects and concepts

through 12–20 min digital animation videos in a self-paced mode. According to the company’s

website, the app has 40 million total users, 3 million yearly paid subscribers and a retention rate

of 85%. In October 2018, it was announced that the app will be available in the UK, United

States, and other English-speaking countries in the future. The company also announced that it

will launch an app for regional Indian languages in 2019, and that it will have an international

version for English speaking students in the future.

Fig. 1. CEO and Founder of BYJU’s: Byju Raveendran

Source: https://wikibio.in/byju-raveendran/
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Factors that contributed to its downfall

1. Financial difficulties: BYJU's is in financial trouble. The corporation is currently having

difficulty raising further funds after burning through billions of dollars in funding in

recent years. The slowdown in India's economy, the drop in customer satisfaction, as well

as the firm's aggressive marketing and acquisition spending are the main reasons behind

it.

2. Concerns about corporate governance: BYJU’s has been charged with a number of

corporate governance violations. For example, inflating its sales, employing dubious

accounting practices, and omitting to disclose important information to investors. These

errors have damaged the company's ability to raise capital by eroding the confidence of

regulators and investors.

3. Declining user satisfaction: BYJU's is experiencing a decline in customer satisfaction.

The high cost of the company's goods the inadequate learning initiatives, and the

aggressive marketing strategies all contribute to this. Losing clients as a result of this

falling user satisfaction has further harmed the company's financial performance.

4. Aggressive accounting techniques: BYJU's has been charged with employing

aggressive accounting techniques to boost its revenue and valuation. These actions are

against the law and unethical, and they may ultimately bring about a company's demise.

The Indian government is currently looking into the company for these actions.

5. Overexpansion: BYJU's has overextended itself by acquiring a number of smaller

companies in recent years like WhiteHat Jr, Osmo etc. The company has struggled to

integrate these companies into its operations, and this has put a strain on its finances. It is

now trying to sell off some of these businesses in an attempt to reduce its debt burden.
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Lessons Learned

1. Importance of corporate governance: The term "corporate governance" refers to how a

firm is governed and managed. The failure of BYJU’s highlights the need of having

effective corporate governance procedures. These practices ought to guarantee that the

interests of all stakeholders are safeguarded and that the firm is operated in a transparent

and accountable manner.

2. Need for transparency and accountability: Accountability and transparency are crucial

for every successful business. BYJU's failure highlights the risks of acting covertly and

secretively. In order to run a company in a fair and ethical way, one must have trust of its

investors, customers and regulators.

3. Dangers of aggressive accounting practices: In simple terms, the purpose of aggressive

accounting techniques is to exaggerate a company's financial performance. The failure of

BYJU’s demonstrates how dangerous these practices are. Companies that employ

aggressive accounting techniques are basically cheating their stakeholders and investors.

This may cause people to lose faith in the company, which leads to downfall of the

company.

4. Risks of Overexpansion: Overexpansion is the rapid growth of a company into new

markets or products. The failure of BYJU’s highlights the dangers of overexpansion. A

company's finances can be strained and it can be difficult to manage its operations, if it

grows too quickly. This may result in many financial problems, which happened in

BYJU’s case.
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5. Importance of customer satisfaction: Any successful business depends on satisfied

customers. The failure of BYJU’s demonstrates the value of prioritizing customers. A

business is more likely to retain customers and attract new ones when it prioritizes giving

customers a positive experience. This can lead to a long-term success of the company.

Future of BYJU’s

The future of BYJU’s is uncertain. The business is dealing with a number of issues, such as

declining customer satisfaction, corporate governance issues, and financial troubles. However,

BYJU's has a powerful brand and a large user base. It remains to be seen if BYJU's will be able

to overcome its obstacles and recapture its former splendor. BYJU's has been one of the most

successful EdTech companies in the world. In the recent years, the demand for BYJU's products

has decreased as a result of India's economic recession. The business has additionally come

under fire for its exorbitant costs and inadequate educational initiatives. Additionally, BYJU's

has been charged with a number of breaches in corporate governance. Inflating its sales,

employing dubious accounting practices, and failed to disclose important information to

investors. These errors have damaged the company's ability to raise capital by eroding the

confidence of regulators and investors. Despite these difficulties, BYJU's has a solid reputation.

Over 100 million people utilize the company’s services in India and other nations. Apart from

that, it has a strong team of educators and engineers. The business might be able to survive and

even grow in the future if it can face its issues and implement the necessary reforms.

The business has a tough road ahead of it, and success is not guaranteed. There are many other

businesses seeking for market share in the fiercely competitive EdTech sector. To win back the

confidence of investors and customers, BYJU’s will need to undertake big changes.
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Conclusion

In conclusion, BYJU's future is clearly paved with a thorough set of strategic imperatives. The

organization needs to undergo a transition if it hopes to restore its position as a market leader in

the EdTech industry. First and foremost, they should enhance corporate governance processes.

Regain the trust of investors, clients, and other stakeholders by establishing a culture of

responsibility and openness. In order to ensure that the company's operations support its

objective to educate and empower learners around the world, it is crucial to simultaneously adopt

more moral business practices. However, BYJU's ability to refocus its efforts on customer

happiness, creating interesting and useful learning experiences while carefully regulating its

expansion, will be the key to ultimate success. Although the obstacles are great, they offer

BYJU's a rare chance to grow stronger, more responsible, and more adaptable to the shifting

requirements of the educational technology world. BYJU's can open the door for a better and

more sustainable future by putting these strategies into practice.

Works Cited

 BYJU’s: The Rise and Fall of an Edtech Giant. insider.finology.in/startups-india/byjus-news-

layoff-downfall.

 BYJU’s.” Wikipedia, 22 Aug. 2023, en.wikipedia.org/wiki/Byju%27s.

 Byju Raveendran.” Wikipedia, 26 Aug. 2023, en.wikipedia.org/wiki/Byju_Raveendran.

 Singh, Ayesha. “The BYJU’s Bust: Decoding; the Rise and Fall of the Once Most Valued Start-

up...” The New Indian Express, 31 July 2023,

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www.newindianexpress.com/magazine/2023/jul/23/the-byjus-bust-decoding-the-rise-and-fall-of-

the-once-most-valued-start-up-2596842.html.

 Jadhav, Mayur. “The Rise and Fall of BYJU’s: A Cautionary Tale for Edtech Startups.”

www.linkedin.com, www.linkedin.com/pulse/rise-fall-byjus-cautionary-tale-edtech-startups-

mayur-jadhav.

 Paul, Binu. “Crisis at BYJU’S: Here’s Why the Edtech Major Needs to Implement Some Drastic

Measures.” Business Today, 28 July 2023,

www.businesstoday.in/magazine/deep-dive/story/crisis-at-byjus-heres-why-the-edtech-major-

needs-to-implement-some-drastic-measures-391661-2023-07-28.