Byju’s bankrupt: Is the edtech crisis deepening?
Mint explains: Byju Raveendran, the maverick founder who held a tight grip on Byju’s, will lose control of the firm to an interim resolution professional (IRP). The IRP will begin the process of forming a committee of Byju’s financial creditors, and subsequently hand over control to them. Raveendran now stares at a tight deadline to settle with the Board of Control for Cricket in India (BCCI), India’s powerful cricket board, out of court.
The BCCI dragged Byju’s to the bankruptcy court for default worth ₹158 crore. If creditors take over, the firm’s fate will lie in their hands. Byju’s has now appealed to an appellate tribunal.
Other edtech companies have also been going through a tough time, having overspent to grow during a funding boom in 2021. Some companies, including Byju’s, went in for aggressive acquisitions, which backfired. Unacademy, the second most valued edtech company in India, saw a string of top-level exits.
It is in conversation with other online education firms for a possible merger, media reports have stated. Yet other edtech companies such as Vedantu have also resorted to a cost-cutting spree, letting employees go, amid a funding scarcity. Many firms, such as Lido, Frontrow and Udayy, have shut operations.
The future of Byju’s 10,000-odd workers in India will depend on the outcome of the bankruptcy proceedings. Ex-employees, who were sacked over the past two years, can claim unpaid dues to the resolution professional. Across Indian edtech firms, teaching jobs and compensation are likely to be impacted.
And the infamous poaching war for educators is set to cool. Over the past year, edtech companies that held the torch for online learning, have increasingly moved offline. Test preparation firms like
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