Indian officials raided Byju’s Bengaluru offices, linking the startup with potential foreign exchange violations and seizing laptops. Meanwhile, Byju Raveendran, the CEO, dealt with the situation from Dubai, facing challenges with a planned $1 billion equity fundraise from Middle Eastern investors.
During calls with top investors, Raveendran defended his company and reportedly broke down in tears. Byju’s and Raveendran have denied any wrongdoing, but the situation has shed light on the challenges faced by Indian startups seeking external funding.
The scrutiny over corporate governance may impact India’s image as an investment destination, jeopardizing its aspirations to become a global tech capital alongside the US and China.
Raveendran’s impressive journey from private tutor to leading a $22 billion company garnered the attention of global investors like Sequoia Capital, Blackstone Inc., and Mark Zuckerberg’s foundation.
However, concerns about Byju’s finances emerged after classrooms reopened, affecting the company’s reputation. Questions were raised about delayed hiring of a CFO, rapid acquisitions of numerous companies worldwide, employee departures, and empty teaching centers.