Byju’s Collapse: How India’s Biggest EdTech Unicorn Crashed From Glory to Crisis

Once celebrated as India’s most successful startup, Byju’s collapse has shocked the global startup community. The company that once revolutionized online learning, attracted global investors, and achieved a massive valuation of $22 billion, is now struggling with lawsuits, debt, layoffs, and brand damage. How did a company with massive potential fall apart so quickly?

To understand the downfall, it’s essential to revisit the journey of founder Byju Raveendran—from his rise to national fame to the decisions that ultimately led to the company’s steep decline.

From a Village Teacher to a Billion-Dollar Vision

Byju Raveendran grew up in a remote village in Kerala and studied in a Malayalam medium school. His journey began unexpectedly when he started helping friends prepare for the CAT exam. His teaching style quickly became popular, turning into packed teaching seminars and later a full-fledged business.

In 2011, Byju’s was officially launched with a mission to make learning fun and accessible. The turning point came in 2015 with the launch of the Byju’s Learning App, which became a huge hit—particularly among students and parents looking for digital education.

The Peak: Funding, Fame & Expansion

Between 2017 and 2021, Byju’s became one of the fastest-growing EdTech companies in the world. Top global investors including Sequoia, Tiger Global, General Atlantic, Qatar Investment Authority, and the Chan-Zuckerberg Initiative backed the company.

During this phase:

✔️ Massive user growth during the pandemic
✔️ Nearly $1 billion in funding in a single year
✔️ Aggressive brand advertising with Shah Rukh Khan

Byju’s became India’s most valuable startup.

Costly Acquisitions: The Turning Point

With newfound momentum, the company began spending aggressively—especially on acquisitions. Over $2.5 billion went into buying companies such as:

Aakash Educational Services

WhiteHat Jr

Toppr

Great Learning

These deals were meant to expand the business rapidly, but they drained cash and created operational complexity.

Warning Signs Begin: Delays, Debt & Revenue Problems

By 2022, cracks started appearing:

Delayed financial disclosures

A massive $1.2 billion loan from US lenders

Over ₹4,500 crore in annual losses

Slowdown after the pandemic as schools reopened

Instead of stabilizing, the company continued spending heavily, creating a widening gap between revenue and expenses.

Controversies & Legal Trouble

As financial pressure grew, so did public criticism. Key events included:

Allegations of misleading sales practices

Layoffs impacting over 5,000 employees

WhiteHat Jr controversy and legal backlash

Investors accusing management of withholding financial information

Loan defaults leading to lawsuits

Government scrutiny for alleged FEMA violations

The controversies damaged the brand and investor confidence, accelerating Byjus collapse.

Valuation Crash & Operational Breakdown

By 2024, Byju’s valuation had fallen more than 99%, dropping from $22 billion to under $250 million. Auditors, board members, senior management, and investors resigned. Employees went months without salary, offices shut down, and the company began selling assets to survive.

Why Did Byju’s Collapse? (In Simple Points)

The downfall can be traced to these key reasons:

Overestimating pandemic-driven growth

Expensive and unnecessary acquisitions

Excessive marketing spend and celebrity endorsements

Poor financial transparency and governance

Huge debt with no steady profit model

Reduced funding due to global economic slowdown

In short: fast growth with weak strategy.

From Inspiration to Warning: The Byju Raveendran Story

Byju Raveendran’s story is both motivating and cautionary. His rise showed what vision and hard work can achieve. But the Byjus collapse highlights the importance of disciplined financial management, ethical practices, and sustainable growth.

What Lies Ahead for Byju’s?

Today, Byju’s is attempting restructuring and asset liquidation. Whether the brand will recover or disappear entirely remains uncertain. The future depends on leadership decisions, market trust, and financial restructuring.

Final Thoughts

The Byjus collapse is more than a business failure—it is a lesson for the global startup ecosystem. Vision must be paired with financial discipline, transparency, and long-term planning. While the company’s downfall is dramatic, it also serves as an important case study in startup strategy, governance, and responsible scaling.