Byju’s net worth drops to $0 on Forbes World’s Billionaires List, loses billionaire title

Byju Raveendran, an Indian edtech entrepreneur, has seen a significant drop in his net worth. He has fallen out of the billionaires list he achieved three years ago due to a series of unfortunate events.

Prosus, a company based in the Netherlands and formerly known as Naspers, recently revealed a markdown of its 9.6% stake in Byju’s to $493 million. This markdown implies a valuation of Byju’s at $5.1 billion, a drastic 77% decrease from its peak valuation of $22 billion last year.

As a result, Raveendran’s 18% stake in the company is now worth less than $1 billion. After considering the loans he took out last year to invest in Byju’s, his personal net worth is estimated to be around $475 million.

This is a significant decrease from his net worth of $1.8 billion in 2020 when he first appeared on Forbes’ World Billionaires list, and his company was valued at $10 billion. His fortune had doubled to $3.6 billion in two years before things started to unravel.

Think & Learn, Byju’s parent company founded by Raveendran, a former math tutor, embarked on a fundraising spree in 2020-21, raising nearly $4.2 billion from various investors, including UBS and Abu Dhabi’s sovereign fund.

A significant portion of this funding was used to finance a series of acquisitions across India, Asia, and the U.S., including the $950 million purchase of Indian test-prep provider Akash Educational Services and $600 million for Singapore’s Great Learning, a firm specializing in higher education and professional training.

However, the rapid pace of growth had its drawbacks. Analysts suggest that Byju’s expanded too quickly without adequate checks and balances. For example, the company did not have a chief financial officer from December 2021 to April 2023. While Byju’s clarified that it had vice presidents of finance for its various divisions, it has yet to file its financial results for the year ended March 31, 2022.

The last published results were in September 2022 for the fiscal year ended March 31, 2021, after a 12-month delay. Byju’s reported a loss of 45.6 billion rupees ($573 million), a significant increase from 3.1 billion rupees the previous year. Revenue also fell by 3% to 24.3 billion rupees during the same period.

Byju’s funding rounds

Raveendran participated in the company’s funding round in March 2022 to reassure nervous investors, investing $400 million at the $22 billion valuation. However, the much-publicized funding rounds did not translate into actual funding as investors such as Sumeru Ventures and Vitruvian Partners withdrew their support.

Despite this, Raveendran remained committed, stating at the Forbes Global CEO conference in September 2022, “I’m going all in.” He added, “I’ve been doing this for 15 years, and the aim is to do this for another 30 years. The world needs 10 more companies like ours. If you do good, you’ll end up doing well.”

However, this did not convince some investors. BlackRock reduced Byju’s valuation to $11.5 billion in October and further to $8.4 billion in May. Prosus, a major global investor in edtech that had funded Byju’s with $536 million since 2018, was even less generous.

In September 2022, Prosus, which has a dozen edtech investments, including San Francisco-based upskilling platform Udemy and New York-based social learning community Brainly, reduced the value of its investment in Byju to $578 million, valuing the company at $6 billion.

In its 2022 annual report, Prosus noted that “in September 2022, the group lost significant influence in Byju’s as it no longer exerts significant influence over the financial and operating policies of the entity.”

The Bangalore-based company has faced a series of crises, the most recent being the resignation of its auditor Deloitte in June due to excessive delays in preparing financial accounts. Three board members also resigned.

Byju’s is currently in the process of reconstituting the board by bringing in a few independent directors. It is also planning to establish a board of advisors to guide the founders. At a recent executive board meeting with shareholders, Raveendran acknowledged his mistakes but emphasized his focus on making corrections.

In June, the company announced plans for an IPO for Akash by mid-2024. Neither Raveendran nor Divya Gokulnath, his wife and the company’s co-founder, responded to calls seeking a comment on the recent valuation markdown.

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