From Messi to lawsuits: The dramatic collapse of Byju’s empire

The collapse of Byju’s, once India’s most celebrated edtech startup, has become one of the most dramatic downturns in the country’s startup ecosystem. What was once seen as a global success story backed by billion-dollar investors, celebrity endorsements and aggressive international expansion is now facing insolvency proceedings, cross-border legal disputes and severe financial distress.

The latest blow came after a Singapore court sentenced founder Byju Raveendran to six months in jail for contempt of court related to non-compliance with asset disclosure orders. The ruling has intensified scrutiny around the company’s financial management and global legal troubles.

Founded in 2011 as Think & Learn Pvt Ltd, Byju’s rapidly emerged as a dominant player in India’s online education sector by capitalising on the growing demand for digital learning and competitive exam preparation. The company saw explosive growth during the Covid-19 pandemic when schools shifted online and investors aggressively funded edtech businesses worldwide.

At its peak, Byju’s was valued at approximately $22 billion and became a symbol of India’s startup boom. The company signed football superstar Lionel Messi as a global brand ambassador and sponsored the Indian cricket team, further strengthening its global image.

The startup also pursued rapid expansion through major acquisitions, including Aakash Educational Services, Great Learning and Epic, spending nearly $3 billion to build a global education platform.

However, the turning point came in 2021 when Byju’s raised a massive $1.2 billion term loan from overseas lenders. Initially celebrated as a milestone for Indian startups, the loan later became the centre of a major financial and governance crisis.

Concerns began emerging after repeated delays in publishing audited financial statements. Investor confidence weakened sharply when the company eventually disclosed losses of nearly ₹4,588 crore for FY21.

The situation worsened when global audit firm Deloitte resigned, reportedly citing communication and reporting concerns. Later, BDO’s India affiliate also stepped down, further intensifying governance-related fears among investors and lenders.

Legal disputes escalated globally after lenders accused the company of breaching loan conditions and questioned the movement of nearly $533 million linked to the loan proceeds. Multiple court cases emerged across the United States, Singapore and India involving allegations related to undisclosed fund transfers and asset management practices.

In India, insolvency proceedings against Think & Learn Pvt Ltd were initiated after unpaid dues to the Board of Control for Cricket in India (BCCI). Ironically, the same cricket sponsorship deal that once symbolised Byju’s rapid rise became part of the company’s financial crisis.

Another major battle now centres around Aakash Educational Services, considered Byju’s most valuable remaining asset. The company risks losing significant ownership control after opposing fundraising efforts that could substantially dilute its stake.

Operational problems also intensified as employees reported delayed salaries, mass layoffs and internal uncertainty. Several board members and investors openly criticised management decisions and corporate governance practices.

The company’s valuation has since collapsed dramatically, with some investors reportedly valuing the firm at close to $1 billion or lower. Forbes also reduced Byju Raveendran’s net worth to zero amid the ongoing crisis.

Industry observers now view Byju’s downfall as a cautionary example of the risks associated with aggressive debt-fuelled expansion, rapid scaling and weak corporate governance during the global startup funding boom.