In a latest revelation, the Enforcement Directorate (ED) has issued a notice to edtech major Byju’s, asking it to pay Rs 9,000 crore for allegedly violating foreign funding laws, said the sources.
How Did This Happen?
Although, the Indian edtech unicorn has denied receiving any such communication from the authorities.
Byju’s received foreign direct investment (FDI) of around Rs 28,000 crore between 2011 and 2023, said the sources in the ED.
The edtech major, the sources said, remitted around 9,754 crore to foreign jurisdictions during the same period in the name of overseas direct investment.
Contrary to that the edtech major has posted on its official X handle that it has not received any such communication.
The company’s statement said, “Byju’s unequivocally denies media reports that insinuates Byju’s of any FEMA violation. The company has not received any such communication from authorities.”
The Unraveling Of India’s Most Valued Startup
It seems that ED’s notice is the latest development in the unraveling of what was India’s most valued start-up at one time.
If we go back in history, Byju’s parent company, Think and Learn Private Limited, was set up by engineers and teachers Byju Raveendran and his wife Divya Gokulnath in 2011.
They offered online learning programmes for competitive exams initially.
Afterworld, the company launched the Byju’s learning app during 2015, their first step in what became a steep growth curve.
Next they launched a math app just two years later for children and another to help parents track their kids’ progress.
In the next three years, Byju’s had over 1.5 crore users by 2018 as the company reaches millions of homes in small cities and rural areas.
But, the company’s game totally changed when the app’s popularity got a massive boost during the Covid pandemic, as schools were shut and children had to shift to a digital mode of education.
But after returning to the normalization post Covid days, its downturn began, posting a massive loss in 2021, its value declined gradually.
The company came on the radar of law enforcement agencies too.
The edtechs swift unraveling caused among the reasons cited behind is a massive acquisition spree that became a liability when children returned to schools and business dropped after the pandemic.
Besides this, Byju’s has also faced serious allegations regarding its functioning.
For instance, parents have accused the edtech major of coercing them into buying expensive courses and then backtracking on promises.
Not only that, the edtech company has also faced allegations of treating its employees poorly and made headlines for laying off thousands as it tries to cut costs.
The ED raided Byju’s office in Bengaluru earlier this year over suspected violation of laws that govern foreign funding.
Byju’s troubles are not getting over the company has also faced trouble overseas after lenders moved a US court, accusing Byju’s of defaulting on payments and breaching loan agreements.
Lateron, the edtech major sued the lenders, accusing them of harassment.
