Byju’s: How India’s Largest Edtech Company Went From Education Provider To India’s Biggest Startup Scam

Once the poster child of India’s tech-entrepreneurial rise, Byju’s rose from humble beginnings in Kerala to a $22-billion valuation and global recognition. Within a few short years, however, it collapsed into a maze of lawsuits, insolvency fights, regulatory probes and explosive allegations that billions were misdirected — including a US court filing accusing the company of “roundtripping” a $533 million loan back to the founder and his affiliates. This is the story of how a celebrated education startup became, for many, the defining corporate scandal of India’s startup era.

Peak and tumble: Byju’s falling from $22 billion to “zero”

Byju’s reached its apex in 2021–2022. Backed by marquee international investors and buoyed by huge post-pandemic demand for online learning, the company’s valuation peaked at roughly $22 billion in 2022. Investors poured in hundreds of millions — and Byju’s went on an aggressive acquisition spree, buying offline coaching chains, international edtech businesses and product lines to stitch together a global education empire.

But when external financing tightened in 2022 and 2023, the company’s leverage and complexity were suddenly exposed. Creditors pressed, cash dried up, high-cost acquisitions revealed integration challenges, and a string of legal fights began to surface. In mid-2024 and into 2025, financial analysts and some investors effectively assigned Byju’s no enterprise value — HSBC published research that treated large strategic investors’ stakes in Byju’s as effectively worthless, and major shareholders such as Prosus wrote down or wrote off almost all the value of their holdings.

Who is Byju Raveendran?

Byju Raveendran is the charismatic founder and public face of Byju’s. Born in 1980 in Azhikode, Kerala, he started coaching students for competitive exams and rapidly built a strong reputation as an engaging teacher. With his wife Divya Gokulnath (an early student who later became co-founder and executive), Raveendran founded Think & Learn Pvt Ltd — the holding structure behind the Byju’s brand — and transitioned from offline coaching to app-based delivery, branding the product on his persona (“Byju’s — The Learning App”). Over the next decade the company scaled, raised several funding rounds, and diversified into tutoring, test prep and school partnerships.

Raveendran’s leadership style — founder-centric, rapid expansion, and high personal involvement in hiring and strategy — was celebrated during the growth phase. Later, it became focal in criticism that corporate governance structures were weak and decision-making concentrated. He and Divya remain major figures in the company’s ownership and management web.

How Byju’s started — a quick origin story

The company’s genesis is straight out of a coaching-centre success narrative: Byju’s began with free classes run by Raveendran for friends and acquaintances preparing for engineering and management entrance exams. Seeing demand, he formalized offerings, created recorded lessons, and launched an app and paid products. The combination of personality-driven pedagogy, slick production values and strong digital marketing helped the company scale rapidly, particularly during COVID-era lockdowns when online learning demand surged. Over the 2016–2021 period, Byju’s moved from being a national success story to a global edtech unicorn.

Founders and leadership: who built Byju’s?

• Byju Raveendran — founder, primary promoter and public face.

• Divya Gokulnath — co-founder, early student, and a senior executive associated with product, teacher recruitment and branding.

• A broad set of senior executives and investor directors joined over time; but the company’s governance was criticized for being heavily founder-led with limited independent checks during its most aggressive expansion.

The catalogue of controversies, allegations and “scams”

Byju’s troubles are not a single headline; they are a long list of operational, legal and governance problems that converged. Below is an organised catalogue of the major allegations and controversies that have surrounded the company.

1. The $533 million “roundtrip” allegation (loan misappropriation)

Arguably the gravest recent allegation concerns about $533 million of loan proceeds that a US bankruptcy/Delaware court filing and related filings claim were misdirected. Lenders and bondholders engaged in litigation to find $533 million in proceeds allegedly moved away from the US-based entity (BYJU’S Alpha) through a chain of transfers — and the filing said a substantial portion was routed back to entities owned or controlled by the CEO/founder and affiliates. The language in the filings described the transfers as “roundtripping” and asserted the funds were not used for legitimate business purposes. Byju’s and the founders have denied the allegations as false and misleading; litigation in multiple jurisdictions — US bankruptcy courts, arbitration tribunals and Indian courts — followed.

These filings are consequences of a larger dispute between the company, its international bondholders and litigants who pressed for disclosure of funds and deemed distributions. In 2024–2025 the US bankruptcy judge penalised company executives for non-cooperation in locating the funds, and some directors were held in contempt for failing to disclose information about the loan proceeds. The litigation framing has been severe: civil allegations of fraudulent transfers, discovery orders, and enforcement steps across borders.

2. State tablet deals and political allegations

Byju’s entered large contracts with state governments to supply educational content pre-loaded on tablets or Interactive Flat Panels for government schools. In several states, opposition parties and critics alleged that these purchases were inflated or mismanaged, and questioned the procurement processes. For example, Andhra Pradesh at one point halted renewals or purchases and publicly reviewed its arrangements. Critics (including political parties) suggested public funds were used without adequate evaluation of educational outcomes and that device pricing and procurement raised red flags. These allegations prompted public scrutiny and political headlines, particularly where procurement intersected with election cycles.

3. “Government MoU” allegations (₹1,000 crore claim)

Political opponents and some critics alleged separate large-scale MoU deals (often publicised as partnerships to digitise classrooms or provide content) were done without proper empirical evaluation of the app’s effectiveness and with economic implications on the order of hundreds of crores. Some opposition leaders characterised those pacts as tantamount to a ₹1,000 crore misuse. These allegations are primarily political and investigatory in nature — they attracted media attention and calls for audits — but as with any politically sensitive procurement the evidence and legal conclusions vary by state and investigation.

4. Data leaks and privacy incidents

In 2021 security researchers reported that a vendor server associated with Byju’s (Salesken.ai) had left student personal data exposed. Reports indicated the leak included names, phone numbers, addresses, email IDs and even loan-related documents for some students. The incident became a focal point for questions about third-party vendor security and how student data (including minors’) is managed and protected. Byju’s has had to deal with reputational fallout and tighten vendor cybersecurity governance as a result.

5. Advertising and sales-practice controversies

Byju’s subsidiaries (notably WhiteHat Jr.) were accused of aggressive sales tactics, misleading advertisements and hard-sell approaches towards parents. Advertising watchdogs and consumer complaints questioned whether sales teams pushed expensive multi-year packages on vulnerable parents. The ASCI in the past asked for certain ads to be withdrawn. Consumer commission orders and district court rulings have at times found the company liable for “deficiency in service” in individual consumer disputes.

6. Governance lapses and probe outcomes

India’s Ministry of Corporate Affairs conducted probes into Byju’s accounting and governance. Some media reports mischaracterised outcomes; the formal government statements emphasised that the investigation did not find clear proof of systemic misappropriation but did find lapses in corporate governance. In short, Indian regulators flagged internal control weaknesses and recommended better governance, while answering political pressure to be seen to investigate thoroughly. At the same time, offshore litigation (e.g., US bondholder suits) painted a more damning picture regarding particular transactions.

What are the latest court findings and legal developments?

The legal landscape around Byju’s is complex and multi-jurisdictional. Several of the most consequential developments in 2024–2025 include:

• US court filings and discovery battles over $533 million: Delaware and US bankruptcy proceedings involved demands to locate and preserve $533 million that lenders say is missing or improperly transferred. Those filings include detailed forensic allegations about transfer chains and “roundtripping” to affiliates controlled by company insiders. Byju’s and Raveendran have denied deliberate wrongdoing; litigants have sought asset preservation orders and discovery.

• Penalties for non-cooperation: US judges imposed penalties against some company directors for failing to disclose information in the discovery process, reflecting the court’s frustration at opaque financial trails.

• Investor write-downs and enforcement actions: Major investors, notably Prosus, took write-downs and effectively marked their stake as worthless for accounting purposes. Prosus’s move was both a market indicator and a trigger for more investor pressure.

• Domestic probes and asset restraint: Indian courts (including Karnataka High Court) issued orders that restrained the founder and his holding companies from alienating assets, to preserve value for creditors as enforcement and creditor claims continued. Regulatory agencies in India emphasised corporate governance lapses even where they did not immediately call the findings “proof of fraud.”

• Arbitration and creditors’ remedies: Arbitral awards and creditor actions (including enforcement steps to recognise awards in Indian courts) were being pursued in parallel. In short, Byju’s is entangled in a global patchwork of creditor and litigation claims.

How did things go so wrong? — A structural autopsy

Several structural and strategic missteps explain how Byju’s collapse unfolded:

1. Over-rapid acquisitions and integration failures. Between 2019 and 2022 Byju’s bought many companies — from tutoring brands to international edtech startups. Integration costs, cultural mismatches and inflated acquisition prices left the balance sheet stressed when credit became scarce.

2. Leverage and risky financing. Byju’s took on large loans (notably the $1.2 billion term loan in 2021 that executives later admitted was a misstep). When market liquidity tightened, the loan burden became acute and the company faced refinancing risk.

3. Founder-centric governance. Decision-making concentrated with founders and a small executive circle. That approach can be decisive during scale-up but increases risk of governance lapses when things go wrong and independent oversight is weak. Indian investigators explicitly flagged governance weaknesses.

4. Complex offshore structures. The company’s cross-border entities, funding vehicles and multiple affiliates made transparency harder and complicated creditor remedies across jurisdictions — creating opportunities for litigation over where value actually resides. The $533 million dispute highlights the risks of complex corporate webs.

5. Operational issues and consumer distrust. Reports of heavy-handed sales, consumer refunds, and data vulnerabilities undermined brand trust. In education, reputation matters: parents and institutions are sensitive to service quality and privacy lapses.

Where is Byju Raveendran now?

There is no simple one-line answer that captures a founder’s physical location and legal status simultaneously, but as of the latest public reports:

• Public posture and statements: Byju Raveendran has publicly stated that he is committed to turning the company around, acknowledging strategic mistakes (including financing decisions) and signalling plans to stabilise operations. He retained a prominent role in communications and remained visible in media interviews and internal messages as the company reorganised.

• Legal constraints: Indian courts have issued interim orders restricting the founder and related holding companies from alienating assets while litigation and creditor claims proceed. These orders are designed to preserve assets for creditors and to prevent value being dissipated during active proceedings. Thus, while Raveendran remains an active participant in the company’s affairs, his freedom to transfer or encumber property has been judicially constrained in parts.

• Reputational position: From a public perception standpoint he has moved from being celebrated as a tech founder to being the central figure in disputes about corporate governance and alleged misappropriation. The US filings specifically name him and affiliates in relation to the $533 million dispute; he has denied the allegations.

In short, Raveendran remains at the centre of the company and the legal battles; he has not disappeared, but his personal and corporate movements are shadowed by legal constraints and intense media scrutiny.

Wider consequences: investors, ecosystem and regulatory lessons

The Byju’s saga is not just a single corporate failure; it has a broad systemic impact:

• Investor caution: Large write-downs by major investors signal caution across venture markets. The speed with which a once-admired unicorn went from $22B to effectively no value has recalibrated investor due diligence expectations in India and beyond.

• Regulatory and legal complexity: Cross-border investments, offshore entities, and complex debt instruments complicate enforcement — and the saga has prompted calls for better transparency in how startups structure funding and deploy loan proceeds. Courts in multiple jurisdictions have had to weigh in, which will shape future litigation strategies.

• Sector trust and consumer protection: For edtech broadly, the scandals highlight risks when consumer-facing companies scale rapidly without robust controls for data privacy, sales conduct and service delivery. Governments and consumer bodies are likely to increase scrutiny of public procurements of edtech solutions.

• Corporate governance reforms: The story has revived debates in India about founder-led governance, independent boards, and regulatory oversight for startups. For future unicorns, the lesson is clear: aggressive scaling without governance foundations can amplify systemic risk.

What remains unresolved?

Several critical questions remain subject to ongoing litigation and probe outcomes:

• Final legal determination about the $533 million. US court filings are serious; but long cross-border discovery, forensic accounting and possible settlements mean the ultimate legal finding (criminal fraud vs. disputed corporate transaction) may take years to crystallise.

• Regulatory enforcement in India. The Ministry of Corporate Affairs flagged governance lapses, but whether Indian agencies will bring criminal charges or accept corporate remediation depends on further probe findings and political/legal calculations.

• Recovery for creditors and investors. Asset restraint orders and arbitration awards open pathways for creditors to try to recover value — but enforcement across jurisdictions is complex and slow. Prosus’s write-down set a market tone but does not itself deliver recovery to bondholders.