“Byju’s unequivocally denies media reports that insinuates Byju’s of any FEMA violation,” the edtech major has said in a statement
New Delhi:
The Enforcement Directorate (ED) has issued a notice to edtech major Byju’s, asking it to pay ₹ 9,000 crore for allegedly violating foreign funding laws, sources have said. The company has, however, denied receiving any such communication from the authorities.
According to sources in the ED, Byju’s received foreign direct investment (FDI) of around ₹ 28,000 crore between 2011 and 2023. 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.
The edtech major has posted on its official X handle that it has not received any such communication. “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 statement said.
The ED’s notice is the latest development in the unravelling of what was India’s most valued start-up at one time.
Established in 2011 by engineers and educators Byju Raveendran and Divya Gokulnath, Byju’s parent company, Think and Learn Private Limited, initially focused on providing online learning programs for competitive exams. The pivotal shift occurred in 2015 with the launch of the Byju’s learning app, marking the beginning of a significant growth trajectory. Over the following years, additional apps were introduced, including a math app for children and a tool for parents to monitor their kids’ progress.
By 2018, the company boasted an impressive user base of over 1.5 crore, extending its reach to numerous households in small cities and rural areas. The app’s popularity soared during the Covid-19 pandemic, becoming a vital tool for education when traditional schools were shuttered, necessitating a transition to digital learning.
However, the upward trajectory took a downturn, highlighted by a substantial loss in 2021, leading to a gradual decline in its market value. Subsequently, the company attracted the attention of law enforcement agencies.
The rapid decline of Byju’s has been attributed to a substantial acquisition spree, which transformed into a burden as students resumed traditional schooling and business dwindled post-pandemic.
Additionally, Byju’s has confronted significant accusations concerning its operations. Parents have lodged complaints against the edtech giant, asserting that they were pressured into purchasing costly courses only to have promises reneged upon later. The company has also faced allegations of mistreating its workforce and garnered attention for large-scale layoffs implemented as part of cost-cutting measures.
Earlier this year, the ED raided Byju’s office in Bengaluru over suspected violation of laws that govern foreign funding.
The company also faced trouble overseas after lenders moved a US court, accusing Byju’s of defaulting on payments and breaching loan agreements. The edtech major later sued the lenders, accusing them of harassment.
