Indian ed-tech unicorn Byjus’ three offices in Bengaluru, Karnataka, were raided by India’s Directorate of Enforcement (ED) officials over alleged forex law violations on Saturday. Under the provisions of the Foreign Exchange Management Act (FEMA), ED raided two business premises linked to the company Byju’s and one residential property linked to the founder, Raveendran Byju.
The Fall of the Ed-Tech Goliath
Founded in 2011 by Byju Raveendran and Divya Gokulnath, Byju’s is a global technology company with headquarters in Bangalore. It uses a freemium business model.
After four years of development, the ed-tech company launched its app in 2015, providing students in grades 1 through 12 (K–12) and those preparing for competitive exams like the IIT-JEE, NEET, CAT, GRE, and GMAT with individualized and successful learning programs. Instead of relying on conventional teaching techniques, Byju’s app offers services and aids thousands of students in learning in novel ways.
The app was created by Byju’s parent company, Think and Learn Private Limited. A total of 15 million users, including 0.9 million paying customers, used the company as of the end of 2018. Previously worth $22 billion, the company has attracted numerous international investors over the years, including General Atlantic, BlackRock, and Sequoia Capital. Byju’s has also made some major acquisitions over the years, some examples being the US-based educational game developer Osmo, Indian ed-tech startup Whitehat Jr., and the Blackstone Group-backed Aakash Educational Services – a household name in India for competitive exam preparation.
In spite of having a plethora of funding, the company has been plagued with controversies and allegations for a long time. The business has drawn criticism for using deceptive tactics to manipulate parents into enrolling their children in exorbitantly priced courses. Byju Raveendran had been summoned by the nation’s top organization for the protection of children’s rights last year, the National Commission for Protection of Child Rights (NCPCR), in response to the same accusations of malpractice involving “hard selling and mis-selling” its courses to students.
Over 2,500 of Byju’s employees had their contracts terminated in October 2022, shocking the ed-tech industry. At the time, founder and CEO Byju Raveendran promised to see to it that laid-off employees had access to newly created relevant positions and would be rehired.
The ED raid
According to ED, the officials managed to seize incriminating pieces of documents and digital data during the raid. Byju’s received FDI (Foreign Direct Investment) worth Rs 28,000 crore ($3.4 billion) between 2011 and 2024.
Think and Learn Pvt. Ltd., the organization in charge of the private online education portal, spent approximately Rs 944 crores ($115 million) on marketing and advertising.
Additionally, according to ED, the company made 97.5 billion rupees in overseas direct investments to a number of foreign countries between 2011 and 2024.
Raveendran and Byju’s reply stoked further ED allegations
In the internal memo, Raveendran claimed that the business had sent some cash abroad to help pay for its global acquisitions. He added that his company made every effort to adhere to the laws governing foreign exchange and that all international transactions were carried out through standard banking channels.
Raveendran stated, “I want to reassure you that we are fully cooperating with the authorities,” adding that the necessary paperwork and statutory filings had been delivered to the Enforcement Directorate.
Byju’s legal team, according to sources, stated that they were already working closely with the agencies. They were confident about the integrity of their operations and remained hopeful of the timely resolution of the matter with due diligence.
However, the agencies have stated that Raveendran has remained “evasive” despite multiple summonings from the ED and has never appeared in person during the investigation. Byju’s remained unavailable for comment regarding the matter.
