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Overhyped wizards

EducationWorld August 2023 | Magazine Postscript

The imminent collapse of the Bangalore-based edtech start-up Think & Learn Pvt. Ltd aka Byju’s, makes one wonder about India’s talking-heads stock market and financial experts who drove up the sky-high valuation of this online tutoring company which rose to $22 billion (Rs.1.8 lakh crore) at its peak in 2020. Common sense and logic should have informed them that online tutoring has inherent limitations in a traditionally conservative country in which internet connectivity is poor, languages are many, Smartphones offer numerous distractions, and rather than Stanford and HBS grads, the company is helmed by two school teachers.

Unsurprisingly in its fiscal year ended March 31, 2021, the company ran up a loss of Rs.4,558 crore, a sum greater than its revenue. The March 2022 balance sheet is not yet ready and isn’t likely to be much better. Unsurprisingly, the auditor and several directors have resigned and 1,000 employees have been fired. The down-sizing of Byju’s to yet another edtech and test-prep company (it acquired the bricks and mortar tutoring company Aakash in April 2021) is inevitable. Meanwhile, Byju Ravindran and his spouse have reportedly bailed out on golden parachutes, having sold company shares valued at Rs.4,000 crore to some incredibly gullible investor.

Even as some of the country’s largest corporates, banks and investors were pouring barrels of cash into Byju’s, investment invitation letters from D.T. Media & Entertainment Pvt. Ltd (regstd.1999) which owns this publication, for a third round of funding received nil response. This despite the sui generis EducationWorld and ParentsWorld having first movers advantage in a market comprising 450,000 private schools, 42,000 colleges and 1,042 universities and PW’s market potential of 60 million households. When we wrote a cover story on the edtech boom, Ravindran was “too busy” to talk to us. Now one can’t help experiencing satisfying schadenfreude.

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