Shortly After Exit, Former Byju’s India CEO Mrinal Mohit Launches New Ed-Tech Venture; A New Name But The Same Game?

Formerly the CEO of Byju’s in India and a key figure in the founding of the ed-tech unicorn, Mrinal Mohit, is set to reveal a new educational venture, according to insiders familiar with the situation.

Sources indicate that Mohit has officially established his new endeavour, which may present competition to Byju’s Tuition Centres (BTC), an offline tuition enterprise launched in 2022.

Although Mohit has refrained from making any public declarations, a close associate of his dismissed the notion of delving into offline tuition services.

Instead, there seems to be a preference for maintaining an online approach akin to Byju’s classes. “It’s still very early days,” the source remarked, declining to provide further specifics.

Mohit, renowned as a trusted aide to Byju Raveendran and one of the earliest students to join the Byju’s journey, is credited with constructing the ed-tech firm’s formidable sales apparatus, which at one juncture constituted a significant portion of the overall workforce.
However, it faced scrutiny for its assertive tactics.

Mohit helmed the CEO position for Byju’s operations in India in recent years, while Raveendran shifted focus overseas to spearhead international expansion and fundraising endeavours.

Departing from Byju’s in September 2023 amidst efforts to streamline operations and revamp sales strategies, Mohit was succeeded by Arjun Mohan, another former protégé of Raveendran.

 

The New Name Of The Same Old Game?
Significantly, Mohit’s swift foray into the education sector with a new venture shortly after his exit from Byju’s has raised eyebrows, and as per one of the aforementioned sources, the nascent company has already inaugurated its inaugural centre in Bengaluru.

It’s understood that at least six employees from Byju’s have also resigned from the ed-tech company to join Mohit’s venture.

Notable among them are Ankit Chaturvedi, who previously held a position in the strategy office, and Prashanth BN, the assistant vice president of technology at Byju’s.

The objective is to commence classes in a comprehensive manner coinciding with the commencement of the new academic year in April.

Byju’s New Competition
The move has sparked interest within the ed-tech community, as companies typically impose non-compete clauses on departing executives who intend to launch competing ventures.
However, in this scenario, Mohit is gearing up to compete directly with his former employer shortly after his departure.

The development unfolds against the backdrop of Byju’s grappling with operational hurdles wherein founder Raveendran purportedly leveraged his personal assets, including his residences, to sustain employee salaries even as discussions are underway with existing investors to secure a USD 100 million funding through a rights issue.

It is expected that this funding round will value the company between USD 500 million and USD 1 billion, marking a significant decline from its peak valuation of USD 22 billion.

Will the company pursue any action in response?
That seems improbable.
“According to protocol, there should be a cooling-off period. However, given Mohit’s significant tenure of 15 years at Byju’s, it’s unlikely that the company will escalate the matter,” shared an individual familiar with the company’s operations.

Byju’s Tuition Centre
In 2022, the ed-tech company ventured into offline coaching with an ambitious plan to establish 500 coaching centers across the nation by the end of that year. A budget of USD 200 million was allocated for the years 2022 and 2023.

This blended education model targeted students from grades 4 to 10 across various educational boards, offering a monthly subscription fee ranging from INR 3,500 to INR 4,000; Byju’s anticipated this new venture to be the next avenue for growth.

Byju’s opted for a retail approach, leasing the tuition centers, standardizing their specifications, and employing teachers who would employ a hybrid teaching method, incorporating both online and offline components.

However, due to financial constraints, Byju altered its course and halted the expansion plans for these tuition centers. Following Bajaj’s departure, Mohit also resigned from the ed-tech company.

The financial strain eventually prompted key staff to exit Byju’s Tuition Centre, worsening the business’s downturn.

“At one point, finances were so tight that employee salaries and even basic expenses like printing books were delayed,” he elaborated.
Himanshu Bajaj, who was appointed as its head from consultancy firm Kearney eighteen months prior, resigned in August to join consultancy firm Alvarez & Marsal.

According to sources, approximately 300 tuition centers are still operational. However, a report by Moneycontrol highlighted that dissatisfaction with the quality and format of courses led to around 60% of customers seeking refunds.

The Same Game Indeed
If reports about Mohit’s venture venturing into offline tuition are accurate, it signifies a return to the original model. Byju’s initially commenced as offline coaching centers in the late 2000s, with Mohit overseeing operations during that period.

Hence, should Mohit’s new venture indeed delve into offline tuition, it would encounter similar challenges. “Each center takes two to three years to become profitable. During this period, substantial resources are required,” remarked a source speaking on condition of anonymity.

Some Bits
Mohit embarked on his professional journey with Byju, narrating his early days; he disclosed how he reached out to Byju Raveendran, a renowned CAT instructor in Delhi, proposing the idea of teaching in the city.

Initially hesitant, Raveendran suggested that if Mohit could gather a group of 100 students for a complimentary workshop, he would reconsider. Undeterred, Mohit and a group of like-minded individuals organized a gathering of 220 students, thus setting the stage for what would become a significant partnership.

Initially serving as the head of business development in Byju’s nascent stages, Mohit steadily ascended the corporate ladder, eventually attaining the positions of Chief Operating Officer and, subsequently, Chief Executive Officer of the India division.

The Viewpoint
There is much scepticism regarding Mohit’s suitability to lead an ethical enterprise, citing past instances of alleged misconduct within Byju’s sales division.

As widely reported in the media, the sales team at Byju’s operated in a manner that prioritized aggressive tactics over ethical considerations, leading to a portrayal of sales personnel as “Byju goons” masquerading as legitimate salespeople.

Hence, the likelihood of venture capitalists (VCs) funding Mohit’s new venture, given these ethical concerns and reservations about Mohit’s leadership style, it’s asserted that VCs may still invest in the venture due to their primary focus on maximizing profits, even at the expense of ethical standards perhaps reflecting broader concerns about the VC industry’s emphasis on financial gains over ethical leadership qualities.

Also, what is the likelihood that Mohit’s new company may replicate the same problematic sales tactics observed at Byju’s, leading to a recurrence of pressure and harassment experienced by sales employees?

Meanwhile, the owner is portrayed as benefiting from fundraising activities while enjoying a comfortable lifestyle, raising questions about the foundation of the venture and its future workings.