First, there was Socrates. Then, there is Byju Raveendran. Between these two figures fall interesting questions and disturbing answers on education, learning, technology, and ethics.
As news came this week of a jail sentence for Byju Raveendran, founder and CEO of his messed-up education-technology startup, I was reminded of my meeting about 25 years ago with eminent professor Mohanbir Sawhney of the Kellogg School of Management, when e-learning was in its infancy.
The amiable professor remarked how education had not changed since the times of Socrates—both he and the ancient Greek philosopher had taught a class of only 60 students at a time.
The potential of scale and the power of the internet and its associated technologies as a distance killer had then held much promise to make advanced education highly affordable.
But what we know, decades later, is that teaching should not be just about turning learning into a consumer good and selling it aggressively as if it were a bar of chocolate.
Rise and Fall of Byju's EdTech Dream
There is much to “learn” from Byju’s—on how not to run a startup, and how education is not a fast-moving consumer goods business. The irony is that the official name of the company behind the Byju’s brand is Think & Learn Pvt Ltd—though it seems not much thinking or learning has gone into the venture that was launched in 2011.
The nobility that is often associated with teaching had gone completely missing as we saw the rise and what is evidently the fall from grace of Byju Raveendran. For some reason, I am also reminded of my meeting a few years ago with Anand Kumar, the teacher from Bihar who founded the ‘Super 30’ programme that provides free coaching, food, and accommodation to underprivileged students every year to crack the cutthroat competitive examination to enter the famed IITs.
If intensity is the unassuming Anand Kumar’s core skill, audacity turned out to be Raveendran’s dubious collateral.
As things stand, Raveendran has decided to appeal against the Singapore jail sentence relating to a $150-million loan from Qatar Investment Authority to a Singapore-based firm where Raveendran was the guarantor. He says he has agreed “in principle” to a settlement after he was sentenced to six months in prison on a contempt of court charge linked to a dispute over disclosures.
But that seems only like a minor episode in a 15-year-journey that saw ambition, tenacity, and then, some old-fashioned hubris. Byju’s was valued at $22 billion as the appeal of online education surged during the COVID-19 pandemic in an industry that was seen as a $25-billion market opportunity circa 2025, zooming up from about $3 billion in 2020.
Between late 2021, when Byju’s raised $1.2 billion in a term loan and mid-2023, when it ran into a loan default, the company reported losses of more than Rs 4,500 crore, raised more finance in two rounds, and offered higher interest rates once. Such casino capitalism is hardly what one would expect from a startup founder who turned 46 last January.
Before its big loan, Byju’s had acquired Aakash Educational Services Limited (AESL) in April 2021, evidently turning the founder from a teacher to an M&A player. Between Aakash and Great learning, Byju’s paid more than $1.5 billion for its buyouts.
Here, we may also pause to throw some tomatoes not just at startup founders who mistake arrogance for confidence, but also lenders and venture capitalists who have lost their way in a narcotic pursuit of quick success—a far cry from the days when VCs were supposed to be mentors who offered patient capital to geeky founders and generate creative disruptors and new technologies.
VCs & Entrepreneurs: A Love-Hate Relationship
To some extent, VCs coming to India had also not bargained for some bad boy behaviour from startup founders, on which I had written four years ago for The Quint, mentioning Housing.com co-founder Rahul Yadav and BharatPe co-founder Ashneer Grover as “imposter boys” in a world of poster boys. The VC firm Sequoia Capital had then cribbed about corporate governance issues among some startups. Byju’s seems to have gone one step further in flashy ambition.
Sequoia was also one of Byju’s investors. Evidently, like women mysteriously falling for bad boys, VCs also have complicated relationships with hungry entrepreneurs before they repent in leisure. Often, they seem to be encouraging a buy-and-sell strategy that is less about building a company and more about an intended big-bang IPO exit.
The chronology of Byju Raveendran’s misadventure also shows a narcissitic streak—beginning with the founder naming the EdTech app platform after himself, targeting unsuspecting middle-class parents as if he was selling a detergent power, sponsoring the Indian cricket team (besides using the FIFA World Cup as a marketing opportunity) and above all, landing himself in a lawsuit with the mighty Board of Control for Cricket in India (BCCI).
Surrounded by angry creditors and sundry financiers, Byju’s is now caught in court cases and a corporate insolvency dispute with the BCCI on sponsorship dues that one would expect from a giant listed company, but not a startup entering its teens.
There is a thin line that divides the risk-taking appetite of a startup founder from the audacious arrogance of betting big and sitting in denial of his own misdeeds. Failures in startups is not a big deal.
The VCs and founders are found to bet big and win big in a high-risk game. But corporate governance and ethics should ideally be non-negotiable. “I screwed up,” sounds better from an entrepreneur’s mouth than “I am too big to fail” or evasive tactics where one is not even sure where his geographical location is.
That takes us back to Socrates, who favoured probing and open-ended questions to expose contradictions in a person’s thinking. If he were alive, VC firms might want to hire him.
(The author is a senior journalist and commentator who has worked for Reuters, Economic Times, Business Standard, and Hindustan Times. He can be reached on Twitter @madversity. This is an opinion piece and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for the same.)