[2/2] The learning trap. How Byju's took Indian edtech for a ride (The learning trap) (Category Management)

Continuing the history of BYJU's (1 and 2) It is worth talking about the moment when aggressive growth failed and what all this led to. According to the author of the book, the following problems led to the fall **1) The debt spiral (2023–2024)

• Rising rates**: Fed rate hikes have increased the cost of BYJU'S dollar loans.
  **- Collapsing bail.**BlackRock Reduces Company Valuation to $1 billion by December 2023 Partners froze educational loans.
  - Sale of assetsThe sale of Epic! and Tynker brought much less than was spent on their acquisition at the peak of the covid era. 2) Legal problems
• Bankruptcy in the United States: A U.S. judge ruled the transfer of funds to be a “direct fraud,” initiating an investigation against Ravendran.
  - Insolvency proceedings in India: NCLT commences bankruptcy proceedings in 2024 Creditors have paid back a small portion of the funds.
  **- Investigations.**Indian authorities have begun investigating money laundering and travel bans are in place against Ravendran.

All this affected not only BYJU’s, which was the leader of the edtech sector, but also other companies. 1) Outflows of investment
Unacademy and Vedantu lost more than half of their value and global funds (Sequoia, SoftBank) We cut back on investment.
Tough audit: Investors now require audited reporting and plans to reach profitability.
2) Regulatory changes
Consumer protection: The Edtech Consortium has introduced mandatory refunds and "cooling periods."

• Code of ethics: c 2024 Guarantees of success in advertising and targeting minors are prohibited.
  3) Market restructuring
  Hybrid models: PhysicsWallah and upGrad develop offline centers, combining them with digital content.
  Niche focus: start-ups like Scaler and Masai School have shifted to vocational training, avoiding K-K.12 (schoolboy).

4. Systemic implications - Responsibility of founders: The Ravendran case spurred reforms to the Companies Act.
   - Maturity of the sectoredtech share in the Indian education market ($180 billion) fell 3,8% (on 6,2percent 2022 d.).

As a result, the collapse of this unicorn in the Indian market shows how the pursuit of higher valuations, risky bets on the acquisition of companies, unprofessional management and personality cult interfere with the sustainable growth of the company. Although the company has given access to education to millions, its management and financial failures have eroded trust. The future of Indian edtech depends on balanced growth, ethical practices, and a focus on educational outcomes, not market hype.

P.S. It seems that Russian edtech companies have also blown away after a covid, although not as brightly as BYJU's.

#Edu #SelfDevelopment #Management #Leadership #Processes