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Year 2013. Delhi's Indira Gandhi Indoor Stadium was crowded with 14,000 people. Surprisingly, these people didn't come for a singer or a Bollywood star.
Explore the rise and fall of BYJU'S, India's EdTech giant, from its charismatic founder to its aggressive sales tactics and eventual downfall.
Key Takeaways
- Innovative teaching and digital transformation can create rapid growth in EdTech.
- Aggressive sales strategies can drive short-term success but risk long-term reputation and sustainability.
- Market shifts, like the return to offline education, can expose fundamental business model weaknesses.
- Heavy reliance on funding and acquisitions without solid profitability can lead to financial distress.
- Sustainable growth requires balancing expansion with ethical practices and customer trust.
What the video covers
- Byju Raveendran started BYJU'S as a small math class in 2006, growing it into India's largest EdTech company.
- The company adopted a freemium model and expanded rapidly across multiple Indian cities before digitizing its content.
- BYJU'S launched a mobile app in 2015 with engaging, multimedia educational content tailored to different learning styles.
- Aggressive sales tactics, including emotional appeals and refund offers, fueled rapid user acquisition and revenue growth.
- BYJU'S became India's first EdTech unicorn in 2018 and saw explosive growth during the COVID-19 pandemic lockdowns.
- The company expanded aggressively through acquisitions like WhiteHat Jr and scaled to 58,000 employees by 2022.
- Sales pressure and unethical practices emerged, including sales reps funding down payments and strict targets.
- The shift back to offline education exposed flaws in BYJU'S online-only business model and led to declining customers.
- Financial troubles mounted with loan defaults, lawsuits, and asset sales such as the US-based Epic platform.
- By mid-2023, BYJU'S had drastically downsized and faced a severe downfall after years of prioritizing growth over sustainability.
Chapters
- 00:00Introduction and Early Years of Byju Raveendran
- 00:40Byju's Teaching Style and Early Expansion
- 03:24Digitization and Launch of BYJU'S App
- 05:10Funding and Aggressive Sales Model
- 08:31Sales Techniques and Customer Acquisition
- 12:12Impact of COVID-19 on BYJU'S Growth
- 14:12Peak Growth and Acquisitions
- 17:16Sales Pressure and Ethical Issues
- 20:43Business Model Flaws and Decline
- 24:10Financial Troubles and Downfall
Full Transcript — Download SRT & Markdown
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They came here to study math. And the teacher was Byju Raveendran. A charismatic teacher who mastered the art of teaching.
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In the future, Raveendran, on the basis of his mastery, was going to build India's biggest EdTech company, BYJU'S.
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And sadly, he was going to see the downfall of the same company in front of his own eyes.
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But what's the whole story behind BYJU'S rise and fall? Let's get to know in this video.
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Byju Raveendran was born in Kerala in 1980. His parents were teachers in a local government school.
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Raveendran, since childhood, had a deep attachment to two things: sports and mathematics. Like every Indian middle-class family in the 80s and 90s, his family also gave him two career choices.
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Doctor or engineer. Raveendran chose engineering. In the year 2000, he completed engineering and started working in a shipping firm in 2001.
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But two years later, something happened that gave Raveendran a new direction in life. Some of his friends, to get admission in IIMs, wanted to crack the CAT exam. And for that, they asked Raveendran for help.
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Not only did Raveendran teach his friends, but also gave the CAT exam himself. Four out of twelve friends cleared the CAT exam.
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Along with that, Raveendran also scored 100% in the CAT exam. But he didn't join any IIMs and continued his job.
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In 2005, he again gave the CAT exam and again scored a hundred percentile. After that, Byju Raveendran got to be known everywhere as a "CAT topper." And students made a beeline to learn from him.
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In a short time, Raveendran realized that he loved teaching. And he wanted to do this all his life.
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In 2006, he started a small class called BYJU'S Classes for CAT. But very soon, these classes shifted to an auditorium.
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Where he started teaching 1,200 students at a time. BYJU'S classes were on a freemium model.
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The first class was free and the second class onwards was paid. Raveendran's teaching style was very practical.
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He focused on conceptual learning more than marks. For the students who were taught to memorize since childhood, Raveendran's approach was very revolutionary.
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That's why nine out of ten students taking his free classes enrolled for his paid classes.
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Seeing this success, Raveendran expanded this model to four cities: Bengaluru, Mumbai, Pune, and Chennai.
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During these classes, he met many talented students and his future wife, Divya Gokulnath. Some of these students and even Divya later became co-founders of BYJU'S parent company Think and Learn Pvt. Ltd.
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And some students became early employees. By 2009, Raveendran had expanded BYJU'S classes to nine cities.
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He worked day and night and took classes every week in every city. During his travels, he worked on making his content more accessible and engaging.
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His every class had so many students that it was not possible to ask doubts.
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Therefore, Raveendran designed his content in such a way that the student gets the answer to every possible doubt.
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Due to his hard work, very soon, the demand for BYJU'S classes started coming from many other cities.
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But for Raveendran, it was not possible to be physically present in all these cities.
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And he was tired of working 24x7. And that's why Raveendran decided to digitize BYJU'S.
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In 2009, he used V.S.A.T, that is Very Small Aperture Terminal satellite-based broadcasting technology, and broadcasted his lectures in 45 cities.
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With this technology shift, he had set the foundation of a very big EdTech company.
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In 2011, to expand further, he established Think and Learn Pvt. Ltd. He formed a team of passionate teachers.
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And most importantly, BYJU'S entered the school tuition segment. At that time, there were 25 crore school-going students in India.
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And Raveendran understood that if he wants to reach all of them, he has to launch a mobile app.
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In 2013, BYJU'S took 50 crore funding from the Manipal Group for 26% equity. And he also started developing his mobile app.
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BYJU'S saw that every student's learning approach and speed are different. Some students understand better by videos, some by text, and some by practical application.
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That's why BYJU'S put all these approaches in his app. Moreover, students could take lessons at their own comfortable pace.
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BYJU'S knew that students already spend a lot of time on their phones, games, and movies.
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This means that students will focus on studies only when the quality of educational content is similar to games and entertainment content.
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That's why BYJU'S hired expert teachers, motion graphics artists, 3D designers, and even professional musicians. The BYJU'S Learning App was finally launched in 2015.
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Apart from the app, BYJU'S used to sell preloaded courses in tablets and SD cards.
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As soon as these two products were launched, customers gave a very good response. Looking at this, in June 2015, Sequoia invested $25 million in BYJU'S.
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In 2016, Mark Zuckerberg's organization invested $50 million. After millions of funding, BYJU'S only aim was sales.
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BYJU'S hired hundreds of fresh engineering graduates and formed an aggressive sales team. Their sales process was very clever.
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It started with BYJU'S TV ad. Parents used to watch BYJU'S ad and download its app.
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After a few days, a salesman of BYJU'S used to call them and book an in-person counseling session with them.
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During the counseling session, the salesman first asked the child about his interests and ambitions and used to build a personal bond with him.
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After that, such questions were asked to the child which he could not answer. For example, there was a common question: how many points are there in a circle?
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Most of the children would fail to answer this question. And this is what the salesman of BYJU'S wanted.
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Then the salesman used to show a high-quality video of Raveendran on his tablet in which he explains that there are infinite points in a circle.
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After that, the parents were asked a simple question. If your child is not able to answer such a basic concept, then how will he perform in the boards and the other future competitive exams?
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After this question, parents felt guilty and nervous about their child's future. Exploiting this very feeling of the parents, the salesman used to pitch BYJU'S learning app as a solution.
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To make the deal lucrative, they were offered a 50% scholarship and also given a 100% refund option.
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Even then if the parents did not buy it, then the salesman would bring out his Brahmastra.
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The child would be asked some more questions, to which he could not answer. Then videos of topics related to these questions were shown.
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And the same questions were asked again. This time, the child would answer these questions correctly.
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Seeing this improvement of the child, parents would get very impressed. By now, even the child wanted to buy the BYJU'S tablet.
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Finally, parents used to pay the fee and a sale of BYJU'S used to close.
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This was a sales trick that never failed. On the basis of this sales model, BYJU'S kept growing at the speed of a bullet.
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In 2018, with a valuation of $1 billion plus, BYJU'S had become India's first EdTech unicorn.
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And by March 2020, with nearly 4 crore users, its valuation reached nearly $8 billion.
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That's when something happened that gave a bigger speed boost to the growth of BYJU'S.
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COVID-19. We have therefore made the assessment that COVID-19 can be characterized as a pandemic.
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A lockdown was announced in the entire country. From midnight today, the entire country is going to be placed under a complete lockdown.
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And students had to rely on online education. Seeing this opportunity, BYJU'S made its classes free for a few weeks.
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So that it could acquire as many users as possible. Due to this strategy, the app usage of BYJU'S increased by 60%.
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As time went by, the lockdown of a few days had changed into months. And that's why the adoption of e-learning was also increasing rapidly.
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Seeing this explosive growth of the EdTech indu
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They didn't want to miss the opportunity to invest and make money in the EdTech industry.
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That's why they started investing thousands of crores in EdTech companies on demand. Where in 2019, the EdTech sector received a total investment of $429 million, at the same time in 2020, this investment was $2,220 million, and in 2021, it came up to $4,165 million.
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But the catch is that almost 50% of the funding was only received by BYJU'S.
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With the funding of thousands of crores, BYJU'S one by one, started acquiring smaller EdTech startups at very high prices.
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For example, to get entry in coding education, they bought WhiteHat Jr for a whopping $300 million.
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Similarly, they also acquired startups like Tynker, Toppr, Great Learning, Epic, Scholar, and GradeUp. Three of these startups were from the USA.
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And Raveendran wanted to make his place in the US market through these startups. To grow these startups rapidly, BYJU'S took a loan of $1.2 billion.
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Which is a very huge amount. But the biggest news came when BYJU'S acquired Aakash Institute for $1 billion.
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Basically, a 5-year-old EdTech company, BYJU'S, had acquired a 33-year-old coaching giant. Plus, some experts said that BYJU'S paid 20-30% more money than Aakash's value.
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By March 2022, with 58,000 employees, and with a valuation of $22 billion, BYJU'S had reached its peak.
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But there was a problem. The effect of the COVID-19 pandemic was now ending. The World Health Organization today declared an end to the COVID-19 global health emergency.
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Because of this, BYJU'S growth story was going to have a deadly break. A break that was going to shock the whole of India.
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BYJU'S biggest problem was that its sales were increasing at a very low rate compared to its valuation.
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That's why BYJU'S started building immense pressure on its sales team. Reportedly, in the Bengaluru office, employees had to work on 14-hour tiring shifts.
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Sales reps were forbidden lunch breaks without meeting the target. If the customer stopped picking up the call, the entire blame would come on the sales rep.
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Even the sales targets were unreasonable. Every salesman had to bring 1.5 lakh sales per week.
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In 2022, BYJU'S brought in a rule that any salesman who does not meet his minimum 50% target, he would be fired immediately.
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After this rule change, the salespeople started doing whatever they could to meet their target.
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There were many incidents, where parents were pressurized, false information was given, and even intimidated into closing the sales.
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Many times, to close a sales, the salesperson himself gave ₹15,000 as down payment from his pocket.
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Also, there were reports that customers were facing problems in canceling their subscriptions and taking refunds.
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As the story of BYJU'S mis-selling and customer exploitation started to come out, the trust of the parents on BYJU'S went down at an all-time low.
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But for BYJU'S, this was just the beginning of problems. Raveendran and the rest of the top management were ignoring the fact that no matter how many sales they did, it made no difference.
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Because their unit economics were not making sense. They were basically making an overall loss on every sale.
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On average, their every salesman was bringing 2.76 lakh sales per month including cancellations and returns.
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But after deducting the salesmen's cost like salaries, incentives, and travel expenses, gave a net revenue of only ₹1.6 lakh per salesman.
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After accounting the marketing and product cost, the net margin was only ₹57,000 per salesman.
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Finally, after deducting office rent, managerial overheads, and other costs, BYJU'S was making massive losses.
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Looking at these losses, in the end of 2022, BYJU'S tweaked its sales model so that it could reduce its expenses.
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In the new model, the salesman didn't have to do field visits. Meaning, he didn't have to go to the customer's house and give a demo.
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Instead, he had to do all the sales through phone or Zoom call. With this model, BYJU'S expenses came down but with that its sales also fell.
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Because through phone call, the conversion rates were comparatively less. But BYJU's was going to face even bigger problem.
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In late 2022, an announcement from BYJU'S shocked everyone. They announced that they would invest $200 million and open 500 offline tuition centers in different cities.
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But the company that had started the campaign to take Indian education online, why was that company having to go offline?
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Well, that's because BYJU'S was not getting customers for its online learning platform. BYJU'S thought that due to the pandemic, once school students get used to online learning, they will only prefer online learning.
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But this assumption was absolutely wrong. After a 2-year long pandemic, school students were tired of online learning.
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Along with that, parents also realized that their kids easily get distracted while studying online.
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Along with studying, they used to chat, use social media and even YouTube. Whereas, in the offline classes, these distractions were not there.
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At the same time, in offline classes, the accountability that came due to direct interaction with the teacher, was also missing online.
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And that's why ultimately parents and students chose offline education again. Basically, the billions of dollars spent by BYJU'S on the business model of taking education online, the model itself was flawed.
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Money was not going to be made in that. BYJU'S situation was already bad and at the same time, something happened that completely exposed BYJU'S.
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In September 2022, BYJU'S released its earnings report for financial year 2021. According to the report, from 1st April 2020 to 31st March 2021, BYJU'S revenue was 2,428 crores.
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But its losses were almost double than that. 4,564 crores. Basically, that year, BYJU'S lost 12.5 crores daily.
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But what was even more worrying was that 80% of their revenue was coming from tablet sales and only 20% of their revenue was coming from course fees and course streaming.
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According to the revenue, BYJU'S was not an EdTech company at all. It was a tablet selling company.
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This earnings report revealed the bitter truth of BYJU'S to everyone. Because of that, in the time to come, a heap of problems was going to crash on them.
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The first problem was the funding. The BYJU'S company in which a year ago, VCs were investing millions, now, no one was ready to touch that company.
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And because of that, BYJU'S money started to run out. Employees' salaries started to get delayed.
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For months, the vendors' payments were stuck. And the loan repayment also stopped. Then a very big legal problem came up.
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The US-based companies that had given them a loan of $1.2 billion, sued BYJU'S for loan default and violating loan terms.
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Their demand was to gain control of all assets and subsidiaries of BYJU'S. Then in April 2023, there came another shock.
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When the Ministry of Corporate Affairs started an investigation on BYJU'S. Their investigation was about BYJU'S financial and corporate governance practices.
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During this time, due to the deteriorating financial condition, BYJU'S started firing thousands of employees.
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According to EPFO data, by March 2022, there were around 58,000 employees in the company.
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But by June 2023, the same number halved to less than 25,000. To survive, BYJU'S announced to sell its US-based learning platform Epic at $500 million.
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BYJU'S had bought Epic at $1 billion. That means it was losing $500 million on this sale.
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Then in September 2023, due to nonpayment the BCCI started insolvency proceedings against BYJU'S. And to make things worse, in October 2023, ED issued notices accusing BYJU'S of 9,000 crore FEMA violations.
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Along with all these problems, BYJU'S valuation too was crashing. In January 2024, BYJU'S valuation fell to $225 million.
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That means from a peak valuation of $22 billion, its valuation had fallen by about 99%.
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Going by rupee terms, BYJU'S had exhausted its wealth by about 1,80,000 crore. Today, aside from the Bengaluru office BYJU'S has emptied all other offices in India.
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Acquiring paid e-learning customers has become difficult for them. Their offline tuition center business never picked up.
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And finally, other than Aakash all the startups that BYJU'S had bought, they all are in loss.
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Due to all this, BYJU'S has almost collapsed. And there is only one thing visible in BYJU'S future- darkness.
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One thing is clear from the downfall of BYJU'S. The BYJU'S company that had come to revolutionize India's education, didn't have education at its core.
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Their core only had addiction of growth and valuation. And this addiction has resulted in their downfall today.
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If you liked this video, then I would recommend you to watch the next video.
Topics:BYJU'SByju RaveendranEdTechonline educationstartup downfallIndia educationsales tacticsCOVID-19 impacteducation technologybusiness growth
