By Aditya Kalra
NEW DELHI (Reuters) – Indian maths genius Biju Raveendran, who rose from teacher to startup billionaire when his education technology company collapsed this year, now faces his biggest test yet.
The future of Raveendran’s eponymous online coaching company, Bijoux, now hangs in the hands of Indian courts after the country’s biggest startup, once valued by global investors at $22 billion, has plummeted to below a $2 billion valuation. The 44-year-old founder lost control of the company when a court opened bankruptcy proceedings last week.
Facing charges of “financial mismanagement and compliance issues”, the son of a family of teachers from a small southern Indian village is facing a trial that will test the ingenuity that has made him a poster boy for India’s startup world.
His once-thriving company eventually ran into trouble after failing to pay $19 million in sponsorship fees to the Indian Cricket Board, after which a court suspended Biju as director and ordered Raveendran to report to a court-appointed restructuring professional.
An appeals court is due to hear on Monday whether Bijou’s bankruptcy proceedings should be set aside, although the former billionaire has argued in court that his company is solvent and that bankruptcy could mean it is closed and 27,000 employees, including teachers, lose their jobs.The bankruptcy also does not bode well for Bijou’s backers, including Dutch technology investment firm Prosus.
Raveendran has denied allegations of mismanagement or wrongdoing at his company, which in recent months has faced lawsuits over unpaid loans and a boardroom battle with foreign investors who took it public.
The possibility of bankruptcy is a dramatic development for the entrepreneur, described by people who have worked with him as extremely passionate and goal-oriented, with the potential to take an “aggressive approach” in a crisis.
Although Raveendran projected an image of being “refined, elegant and sophisticated” and appeared to follow the advice, “he ultimately lost credibility,” said another executive who resigned as senior vice president at Bijoux last year.
“He said things were getting better, don’t worry, there was funding,” the former executive said.
Raveendran and a spokesman for Bijoux did not respond to requests for comment.
Bijou’s downfall: “We made obvious mistakes”
An engineering graduate, he was encouraged by a friend to become a teacher and started Byju’s in 2011 with face-to-face classes.
According to the company’s website, Raveendran, who “scored 100 percent not once but twice” in India’s highest management exam, started what would become his empire with his wife, Divya Gokulnath, 38, a former student of his.
In education-crazed India, Raveendran has found great success by offering online education programs that cost between $100 and $300. He got a big boost when the COVID-19 pandemic kept students indoors. At the height of his fame in 2021, Forbes estimated that he and his wife had a net worth of $4 billion.
Now they have all collapsed.
Bijoux’s meteoric success was upended when he ignored his colleagues’ advice to expand the business through expensive acquisitions, spent heavily on marketing and was slow to address problems that were damaging the company’s reputation, including dealers who used heavy-handed tactics to mis-sell courses, according to executives and advisers who worked with Mr. Raveendran.
Backed by investors including General Atlantic, Prosus and Facebook founder Mark Zuckerberg’s philanthropy, Raveendran spent millions on the acquisition, which the company says serves 150 million students in more than 100 countries.
“As I have acknowledged many times, while we have grown rapidly, we have made our fair share of mistakes,” Raveendran said in an interview at the World Economic Forum in Davos last year.
The CEO also said that decisions to lay off some of its then 50,000 employees and cut branding costs as it battled the crisis would help shore up Bijoux, which had been losing money, and turn its cash flow positive.
“Every country needs Bijoux,” he said.
(Reporting by Aditya Kalra; Editing by William Mallard)
