Byju’s started as India’s most famous edtech company and quickly became a global name. At its peak in 2022, investors valued the company at 22 billion dollars. Parents, students, and investors once saw Byju’s as the future of digital education. But today, the company is facing one of the most dramatic downfalls in India’s startup history. Problems with debt, layoffs, and angry investors have pushed the company into deep trouble. Byju’s is now a case study on how fast growth, poor financial choices, and weak governance can destroy even the most celebrated companies.
1. The Debt Problem: A 1.2 Billion Dollar Loan
In 2021, Byju’s borrowed 1.2 billion dollars from foreign lenders through a special type of debt called Term Loan B. At that time, the company still had access to plenty of equity money from investors. The founder, Byju Raveendran, later admitted that taking this loan was a mistake. He said the company could have raised funds by selling more equity, but instead chose debt, which created huge pressure.
The situation worsened when creditors accused Byju’s of moving 533 million dollars out of that loan in suspicious ways. They said the money went through a hedge fund in Miami that was run by a 23-year-old without a proper financial background. From there, the money moved to another company in the United Kingdom. A bankruptcy court in Delaware studied the case and ruled in March 2025 that the transfers were fraudulent. This gave creditors the legal right to try and recover the money.
Byju’s US unit, called Alpha Inc., had already filed for bankruptcy in 2024. At the same time, Indian regulators also began insolvency proceedings against the parent company Think & Learn after the cricket board (BCCI) filed a complaint over unpaid sponsorship dues. In July 2025, the Supreme Court of India confirmed that insolvency proceedings must continue. This means both Indian and US courts are now handling different parts of Byju’s debt crisis.
2. Layoffs and Job Cuts
As the debt pressure grew, Byju’s started cutting costs. The biggest cuts came through layoffs. In 2022, the company removed nearly 4,000 employees, most of them from sales and marketing. By early 2024, the total workforce dropped from 60,000 to only 14,000 people. This was one of the biggest downsizings in India’s startup sector.
In 2025, Byju’s planned another round of job cuts. Reports said the company would let go between 500 and 1,000 employees from marketing, business development, product, and technology teams. Even its coding platform WhiteHat Jr. saw layoffs. Employees who left said the process felt rushed and messy. Byju Raveendran himself admitted in an internal note that the company did not handle the layoffs smoothly.
The layoffs damaged employee morale and the company’s brand. Many skilled workers left for competitors, while those who remained felt uncertain about their future. Byju’s once hired aggressively to show fast growth, but now it is struggling to manage a much smaller team.
3. Investor Doubts and Exit
Byju’s relied heavily on global investors. When problems began, these investors lost confidence quickly.
- Prosus, a large tech investor, wrote off its entire 9.6 percent stake in 2024. This meant a loss of about 493 million dollars.
- Peak XV Partners (formerly Sequoia India), Prosus, and the Chan Zuckerberg Initiative resigned from the board in late 2023 and early 2024. They said they could no longer support the company’s governance practices.
- By 2025, Raveendran admitted that Byju’s valuation had dropped more than 75 percent. The company that was once worth 22 billion dollars had fallen to less than 5 billion dollars in value.
Investors also fought legal battles with Byju’s. In March 2024, the company raised 200 million dollars through a rights issue. But investors blocked the use of those funds, and the money went into escrow. Because of this, Byju’s could not pay salaries on time. Investors also pushed for leadership changes, but the founders rejected these moves as invalid.
Regulators in India launched probes into Byju’s financial reporting and fund transfers in 2025. These probes increased investor doubts and added more legal troubles for the company.
4. App Removal from Google Play
Byju’s faced an embarrassing situation in May 2025. Its main learning app disappeared from the Google Play Store. The reason was simple: the company failed to pay its cloud bills to Amazon Web Services (AWS). This showed that Byju’s could not even meet basic operating costs. Losing visibility on the Play Store also meant fewer downloads and less trust among parents and students. For a digital education company, this was a major blow.
5. Founders Fight Back
Even while creditors and investors accused Byju’s of mismanagement, the founders did not stay silent. In July 2025, Byju Raveendran and his co-founders announced plans to file a 2.5 billion dollar lawsuit against US lenders and investors. They claimed that the lenders and their representatives had harmed Byju’s reputation, caused financial damage, and interfered with insolvency cases in India and abroad.
The lenders quickly replied that every court had already ruled against Byju’s and that judgments confirmed the fraudulent transfers of 533 million dollars. They accused the founders of distracting the public with lawsuits instead of solving the financial crisis.
6. What Went Wrong
Byju’s downfall did not come from one mistake. It came from many wrong decisions made one after another.
- The company borrowed too much money when it did not need to.
- It expanded too fast into 21 countries in less than two years.
- It bought many companies without building a strong base in India.
- It hired tens of thousands of employees without planning for long-term costs.
- It ignored the need for strong governance and transparent financial reporting.
Byju Raveendran himself admitted that the company scaled too quickly and made decisions without careful thought. Analysts now call Byju’s a textbook case of how hype, overconfidence, and debt can destroy a unicorn.
7. Current Situation
As of late 2025, Byju’s remains in crisis.
- Insolvency cases are active in both India and the United States.
- Courts are still deciding how creditors can recover the missing 533 million dollars.
- Layoffs continue as the company tries to cut costs.
- Investors like Prosus have completely written off their investments.
- Byju’s apps and services face disruptions due to unpaid bills.
- The company’s valuation has collapsed by more than three-quarters.
At the same time, the founders are fighting legal battles to protect their control. They believe lawsuits against lenders may bring some relief, but creditors show no signs of compromise.
Key Events at a Glance
| Event | Details |
|---|---|
| 2021 Loan | Byju’s borrowed 1.2 billion dollars through Term Loan B. |
| Missing Funds | Creditors found 533 million dollars moved through suspicious transfers. |
| Bankruptcy | US unit Alpha Inc. filed for Chapter 11 in 2024. |
| Insolvency in India | Supreme Court revived proceedings in July 2025. |
| Layoffs | Workforce fell from 60,000 to 14,000 by early 2024, with more cuts in 2025. |
| Investor Exit | Prosus wrote off 493 million dollars; board members resigned. |
| Rights Issue Block | 200 million dollars stuck in escrow due to investor dispute. |
| App Removal | Byju’s app taken off Google Play in May 2025. |
| Founder Lawsuit | Co-founders announced a 2.5 billion dollar case against lenders in July 2025. |
| Valuation Drop | From 22 billion dollars in 2022 to under 5 billion dollars in 2025. |
Conclusion
Byju’s rise and fall tells a powerful story. The company began as a dream of making education digital and accessible. It became a household name in India and then expanded worldwide. But unchecked growth, reckless borrowing, weak financial management, and poor governance turned the dream into a nightmare.
Today, Byju’s is no longer seen as a success story. It is seen as a warning. Startups, investors, and entrepreneurs will study this case for years to understand how not to build a business. Byju’s still exists, but survival looks uncertain. Whether the company can recover or not, its controversies will remain a lesson about ambition, accountability, and the dangers of chasing growth at any cost.
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