WITHERING HEIGHTS

BYJU'S IS CONFRONTING THE CRISIS OF ITS LIFETIME, WITH AUDITOR DELOITTE AND SEVERAL BOARD MEMBERS JUMPING SHIP, AND FUNDING DRYING UP. DRASTIC MEASURES ARE THE NEED OF THE HOUR

- BINU PAUL

MORE THAN 13 acquisitions worth $3 billion. Expansion into international markets. Over $1.5 billion in funds raised. The coveted decacorn badge. And the crown of being the world's most-valued edtech firm. All this achieved in a little over a year in 2021. Those were the halcyon days for BYJU'S.

Cut to 2023, and the edtech major is in a spot of bother. In the past year or so, it has been hit by a funding crunch, a decline in valuation (in May, investment firm BlackRock cut its valuation to $8.4 billion from $22 billion achieved in March 2022; Prosus valued it at $5.1 billion in June), governance issues, low demand as schools reopened after the pandemic, and accusations of aggressive sales practices, among others. Both time and money seem to be running out for BYJU'S, even as new challenges crop up every day. Now, only a bold and miraculous strategy might save the Bengaluru-based firm. And its CEO, maths-tutor-turned-entrepreneur Byju Raveendran, 43, is fully aware of this.

BYJU'S has been a pioneer in the Indian edtech sector. So, any challenges it faces and how it manages them could provide invaluable lessons to the entire ecosystem. Hyper-inflated unicorns competing for a narrow customer base are self-correcting. Hence, the fallout for the sector might not be as severe as expected. "The more significant repercussions, however, could be felt across the larger start-up ecosystem, given the heightened scrutiny from later-stage investors following the high-profile trials faced by companies like BYJU'S and PharmEasy. These investors may demand increased safeguards to protect themselves from business failures," says Anirudh A. Damani, Managing Partner of Artha Venture Fund.

TOUGH TIMES