Byju’s was once a shining star in India’s startup world, rising from a small tutoring venture in 2011 to a $22 billion edtech leader by 2022, fueled by innovative learning tools and massive funding. However, Byju’s downfall came just as swiftly, with its valuation crashing to nearly zero by 2024 amid debts, legal battles, and management missteps. As of March 2025, the company fights for survival in court, offering a powerful lesson for startups everywhere. This blog breaks down five key mistakes behind Byju’s collapse and shares practical solutions to help founders build stronger, smarter businesses.
Byju’s was founded in 2011 when a teacher from Kerala named Byju Raveendran started assisting students with their examination preparations. By 2015, it had transformed into the “BYJU’S – The Learning App” and rode the wave of the online education boom in India, especially during the COVID-19 pandemic. The company received over $5.8 billion from investors like Qatar Investment Authority and Prosus (Tech Crunch, October 17, 2022), which boosted its valuation to $22 billion in 2022. Byju’s purchased Aakash for $950 million and employed Lionel Messi as their brand ambassador later on, expanding its user base to over 150 million. For aspiring entrepreneurs, Byju’s demonstrates how capital and great concepts can combine to form a global leader in education.
Unfortunately, the triumphs of Byju’s did not persist long term. After failing to settle a $19 million debt to the BCCI, they were entangled in legal difficulties, causing them to drown into further financial trouble and almost zero value by 2024 (Business Standard, October 18, 2024). In 2023, the company lost its auditor due to reports of debt exceeding $1.2 billion. Analysts claim the company was trying to hide from financial scrutiny which is why they delayed their reports and lost their Deloitte auditor (CNBC, February 29, 2024). Investors removed Raveendran’s control over the company in 2024 and Byju’s has been embroiled in lawsuits over debt defaults since then. Even with all the turmoil, Raveendran is confident that he will bring the company back on track (Inc42, March 17, 2025). This fall from a $22 billion giant to a struggling business is a warning for startups, showing how quickly things can go wrong without careful planning.
5 Mistakes Made by Byju’s Downfall
These were five significant mistakes made by Byju’s that I have simplified for the reader’s interest, alongside some figures for context. This is meant to be of interest to anyone wanting to learn about startups, particularly how they fail.
Mistake 1: Spending Too Much Money Too Fast
In total, Byju’s had a capital inflow of $5.8 billion, comprising $800 million received in the year of 2022 as reported by TechCrunch. This was followed by a spending spree of $2.5 billion on 20 acquisitions alongside a $40 million FIFA sponsorship deal (Inc42, August 25, 2024). This expenditure left them with a stunning 1.2 billion dollars in the red (Bloomberg, 2023). Such extravagant spending habits took a toll on their finances and paying any profits was out of the question. Failing to heed this warning would lead to suffering the same debt consequences as Byju’s.
So, in order to avoid this: don’t spend more than what you have, create a budget, generate profit and then look to save. Having a smart spending structure stops you from having to rely on external funding for financial upkeep.
Mistake 2: Not Following Basic Rules
Byju’s misplaced their credibility when their auditor left them. By not gouging to their rules, they lost the trust that had been gifted to them. Byju’s commenced in aidable scandalous losses after having bought $17 billion worth of businesses. The result was a staggering loss of $290 million in 2022. Fast unregulated growth has led to immense Byju’s difficulties afterward (CNBC). In order for these disputes to get solved, accurate tracking, real-time sharing, and proper consultant working needs to be implemented. Rules build trust amongst collaborators and investors. By failing to submit any reports for over 2 years, the company lost an audit and also experienced the exit of three major board members (CNBC). This further complicates their matters. Ultimately, all of the missing information would have exposed the lack of credibility the company is trusted with.
Mistake 3: Growing Too Big, Too Soon
The company acquired 17 businesses, including Aakash for $2.5 billion, but they could not manage them properly. This resulted in some $290 million losses in 2022 (CNBC). Losing control over fast growth also caused tremendous issues. After acquiring 17 firms, Byju’s faced difficulties (Inc42). Instead, manage expansion by taking on only those additional responsibilities that you are capable of dealing with. Ensure that you do not dissipate energy and lose sight of your principal objective.
Mistake 4: Focusing on Size, Not Earnings
Byju’s boasted over 150 million users and a net worth of $22 billion, yet suffered losses of $5,592 crores in 2022 due to lack of focus on revenue generation. When COVID ceased to be a demand driver, they were out of options(Fobes India June 22 2023]). While Byju’s recorded a staggering loss of $5,592 crores (Hindustan Times), Byju intends to make profits range soon. Focus on paying customers, not only the user base. A profit-generating business can withstand adverse situations, unlike a publicity-hungry one.
Mistake 5: Ignoring Legal Problems
Defying norms has its price. Byju’s incurred a punishment of $9,362 crore while is also shrouded in investigations with a further $19 million unpaid debt giving rise to a legal claim (Hindustan Times, 2023; Reuters, 2024). Byju continues to grapple with these challenges as late as 2025 (Inc42), which serves as a case in point to showcase how legal challenges can spell downfall for a company. The legal predicaments of Byju, such as the unpaid $19 million debt (Reuters), still woes this entity in 2025 (Inc42). Aimed at avoiding adverse measures that disrupt operations, hire a legal professional on-board, pay dues promptly, and adhere to all governing laws.
Witnessing the fall of Byju’s from a success story with a revenue of $22 billion to a company in disarray in 2025 makes it easier to understand what the lessons the collapse offers while constructing a business. ConsultUp India recognizes that resourcing is only part of the struggle. Our team is ready to legally, strategically, and financially consult to ensure you do not repeat the mistakes that could hinder the smart expansion of your venture. Visit consultupindia.com to learn how we can further boost your venture with our services.
