Troubled edtech Byju’s founder Byju Raveendran spoke to media for the first time since his financial troubles began, and expressed regret over investors ditching the startup in the face of ongoing challenges, worsening the company’s uphill climb.
“When the US lenders called a default and filed in the Delaware court all three directors resigned within weeks. Three investors leaving the board together made new fundraise impossible and that is why we’re here,” Raveendran said, underscoring the impact these departures have had on the company’s ability to secure much-needed capital in turbulent times.
The situation has been exacerbated by a broader trend among investors, with Raveendran pointing out that “some investors—including Prosus—have not invested anything in 4-5 years.”
During the peak of Byju’s aggressive expansion in 2020-21, the mandate from some investors was to “expand to 40 markets,” a strategy that Raveendran defended as essential to the company’s growth trajectory. However, he expressed frustration over the lack of support during tough times. “Many ‘ran away’ after the bad spell started fearing liabilities,” Raveendran said.
“The mandate from every investor back then was to grow aggressively. Some even pushed us to enter 40 markets simultaneously. They were the real beneficiaries of that growth. Sequoia made almost an 8x return on a $50 million investment in no time. Some of these board members made more money from our company than any other in Asia,” he said.