At its peak, Byju’s looked unstoppable.
The company’s logo flashed across Indian cricket jerseys. Shah Rukh Khan fronted its television campaigns. Lionel Messi became its global ambassador ahead of the FIFA World Cup. Investors from Silicon Valley to Amsterdam poured billions into the company. During the pandemic, millions of Indian students attended online classes through its app as parents rushed toward digital education.
In 2022, Byju’s was valued at $22 billion, making it India’s most valuable startup.
Four years later, the same company is battling insolvency proceedings, lender disputes, auditor exits and international court cases.
The latest setback came in May 2026 when reports emerged that a Singapore court sentenced founder Byju Raveendran to six months in jail for contempt of court linked to disclosure obligations in an ongoing legal dispute. Raveendran has since said settlement discussions with lenders are nearing completion and accused critics of pushing a “false and one-sided narrative.”
The collapse of Byju’s is no longer just an edtech story. It has become one of the biggest cautionary tales in India’s startup ecosystem.
Pandemic Boom Fueled Growth
Founded in 2011 as Think & Learn Pvt Ltd, Byju’s began as a coaching platform built around Byju Raveendran’s CAT preparation classes. The company later expanded into school education and aggressively pushed video-based learning subscriptions.
The Covid-19 pandemic transformed its trajectory.
With schools shut and online learning becoming essential, Byju’s witnessed explosive growth. Investors rushed into edtech globally, betting that digital education would permanently reshape learning habits.
Byju’s used that funding boom to scale rapidly through acquisitions. It bought companies including Aakash Educational Services, WhiteHat Jr, Great Learning, Toppr and Epic in deals worth hundreds of millions of dollars.
At the same time, it positioned itself against rivals such as Unacademy, Vedantu and PhysicsWallah in India, while competing for global attention alongside Khan Academy and Coursera.
But the expansion came with mounting financial pressure.
Celebrity Branding Drove Visibility
Few Indian startups marketed themselves as aggressively as Byju’s.
Bollywood actor Shah Rukh Khan became the face of the company’s advertisements for years. Football star Lionel Messi later joined as a social impact ambassador.
Byju’s also signed a high-profile sponsorship deal with the Board of Control for Cricket in India, placing its branding on India’s cricket jerseys during one of the most visible phases of Indian sports broadcasting.
The strategy helped Byju’s become a household name among middle-class Indian families. But critics increasingly questioned whether the company was prioritising aggressive customer acquisition over long-term sustainability.
Former employees and parents also criticised its hard-selling culture. Complaints about aggressive sales tactics and expensive financing-linked subscriptions began surfacing online even during the company’s growth years.
Governance Crisis Emerged in Byjus
The company’s troubles intensified after repeated delays in publishing audited financial statements.
Investor confidence weakened sharply in 2023 after auditor exits and board-level resignations raised governance concerns. Major investors publicly criticised the company’s management structure and internal controls.
Its financial crisis soon spread across multiple jurisdictions.
Byju’s became embroiled in a dispute involving a $1.2 billion term loan with US lenders. Insolvency proceedings followed in India. Legal battles expanded into US and Singapore courts.
In June 2024, Dutch technology investor Prosus wrote off the fair value of its 9.6% stake in Byju’s, becoming one of the first major investors to effectively mark its investment down to zero. The firm disclosed a fair value loss of $493 million.
Prosus had earlier cut Byju’s valuation to below $3 billion from its peak of $22 billion after concerns over governance and cash flow problems.
The valuation collapse was among the steepest ever seen in India’s startup sector.
Byju’s Employees Faced Uncertainty
The crisis quickly spilled into operations.
Thousands of employees were laid off across divisions as the company attempted to cut costs and preserve cash. Delayed salaries and uncertainty around pending dues triggered protests and public criticism from workers.
According to reports, Byju’s was operating in 21 countries and had around 27,000 employees while insolvency proceedings were underway in 2024.
The insolvency process also revealed the scale of financial stress surrounding the company.
Reuters reported in September 2024 that Indian tax authorities sought nearly $101 million in dues from Byju’s. The report also said claims worth over $1.5 billion had been filed by 1,887 creditors during the insolvency proceedings.
The company that once symbolised India’s digital education ambitions was now fighting survival battles on multiple fronts.
Startup Lessons Became Clear
Byju’s collapse reflects a broader shift in the global startup ecosystem.
For years, venture capital rewarded rapid growth over profitability. Startups were encouraged to scale aggressively, dominate markets and spend heavily on branding before focusing on sustainable financial discipline.
That strategy worked during the era of cheap capital and pandemic-driven digital demand.
Once funding conditions tightened and offline education returned, the weaknesses became harder to hide.
Several competitors adapted faster. PhysicsWallah focused on lower-cost models and profitability. Khan Academy retained its nonprofit structure. Others reduced expansion plans and cut spending.
Byju’s, however, remained trapped under debt disputes, legal scrutiny and governance questions.
Its story now stands as one of the clearest reminders that valuation hype alone cannot build a durable business.
India’s startup ecosystem may continue producing unicorns. But the fall of Byju’s has fundamentally changed how investors, founders and consumers view rapid growth stories.
Also Read: How India’s Clean Label Food Brands Are Facing A Major Reality Check After FSSAI Crackdown
