Byju's, India's most-valued startup, has faced a series of challenges, including

accounting irregularities, ED notices, mass layoffs, and term loan issues. The
company, confident in weathering the liquidity crisis without external help, is
focused on raising funds through asset sales and strategic divestments. Despite
setbacks, Raveendran has been actively investing to keep the company afloat, and
Byju’s is in discussions to divest assets like Great Learning and Epic.

Byju's faces challenges from its promoters, including a potential loss

of moral leadership and diluted stakes in secondary sales. The
promoters have experienced a dilution of their stake in secondary
sales, dropping from 71.6 percent in 2015-16 to 21.2 percent in
2023. This dilution is due to multiple rounds of secondary sales,
where the money was raised by founder Byju's Raveendran, his wife
Divya Gokulanth, and brother Riju Raveendran. The promoters have
clarified that the money raised through the stake sale was pumped
back into the company, but VC investors argue that part of it may
have come back to keep the valuation high and alive. Corporate
governance is another issue for unlisted private equity-funded
companies like Byju's. The company's poor standards of corporate
governance have been exposed through the resignation of auditors
and independent directors on its board, as well as investigations by
the Ministry of Corporate Affairs and the Serious Fraud Investigation
Office. Byju's business model has become the model for almost
every startup in the country, with aggressive selling tactics forcing
parents to buy subscriptions. To address this issue, Byju's has
acquired six companies since its inception, but company observers
argue that the reckless valuation of these acquisitions, particularly
those like Whitehat Jr., is the reason for Byju's debt problem.

The company initially aimed to make students love learning and

gained Traction, Valuation, and Strong Brand Value. However, it
became a money-making machine (MMM) and neglected the values
delivered to customers. The company added features to make it
attractive and attract investors and buyers, but these features did
not serve their purpose. While children enjoy audio-visual resources,
they do not become interested in learning and exams.

Byju's downfall can be attributed to its customer-centric approach

being shifted from a brand-centric one to a customer-centric one.
This deviation has led to a lack of interest and hatefulness towards
learning, contradicting the company's promise to "Fall in love with
Learning." Byju's brand equity and money from customers and
investors were earned through its promise of making learning
enjoyable, but it failed to serve its purpose. To address this issue,
the company should consider implementing a hybrid class model
for selective students.