Rise And Fall Of Byju's: Raveendran Is No Longer A Billionaire; Exits Forbes Billionaire Index 2024

Forbes Billionaire Index 2024: Byju Raveendran saw his company's valuation plummet from a peak of $22 billion in 2022 to a mere $1 billion

Byju Raveendran, once celebrated as a titan in the world of education technology, has seen a staggering downfall as his net worth, which stood at Rs 17,545 crore ($2.1 billion) just a year ago, now registers at zero, according to the recently unveiled Forbes Billionaire Index 2024. In an article on Indian billionaires, Forbes said, "Only four people from last year's list dropped off this time, including former ed-tech star Byju Raveendran, whose firm Byju's was enveloped in multiple crises and its valuation was marked down by BlackRock to $1 billion, a fraction of its peak $22 billion valuation in 2022."

Byju's valuation

Byju's, which has been in trouble with a series of crises since 2022, saw his company's valuation plummet from a peak of $22 billion in 2022 to a mere $1 billion, a significant markdown attributed to BlackRock, an investor. Byju Raveendran, known for his pioneering role in founding Byju's as world's most valuable ed-tech start-up, now grapples with the fallout of his once-thriving enterprise. Today his net worth stands zero. 

What is net worth?

Net worth represents the total value of the assets owned by a person or a company, minus any outstanding liabilities. It serves as a crucial indicator to assess financial well-being, offering a snapshot of one's financial standing.

How to calculate net worth?

In simple term, calculating net worth involves a formula: subtracting total liabilities from total assets. Total assets consist of various holdings, including investments, savings, cash reserves, and equity in properties or vehicles. On the other hand, total liabilities comprise all debts owed, encompassing loans, credit card balances, and other financial obligations. By comparing these figures, one can ascertain their net worth.

Why net worth matters in business?

Net worth is a crucial metric in business for several reasons. It gives an idea about the financial health of a company. Investors, creditors, and stakeholders often use net worth as an indicator of a company's stability and viability. Lenders use a company's net worth to assess its borrowing capacity. And then comes valuation. Net worth is a key component in determining the valuation of a business. Overall, net worth serves as a fundamental metric for assessing financial stability, attracting investment, and guiding strategic decision-making in business.

Byju's controversies

Byju's, once hailed as a beacon of innovation in education, has been besieged by a series of crises, including financial woes and mounting controversies. Set up in 2011, the start-up swiftly ascended to become India's most valuable start-up, garnering acclaim for its ground-breaking learning app catering to students across diverse academic levels. However, the revelation of Byju's staggering net loss exceeding $1 billion for the fiscal year ended March 2022 dealt a severe blow to its financial standing.

The diminishing fortunes of Byju's have not only drawn the ire of investors but have also ignited internal turmoil. Shareholders, led by Prosus NV and Peak XV Partners, recently voted to remove Raveendran from his position as CEO, intensifying a power struggle within the embattled company.

Byju's foreign investments also came under scrutiny of regulatory authorities, with the Enforcement Directorate (ED) issuing a lookout circular against Raveendran and serving show cause notices to Byju's parent firm, Think & Learn, over alleged violations of the Foreign Exchange Management Act (FEMA) amounting to over Rs 9,362 crore.

The firm has also sacked of thousands of its employees over the past 12 months in order to cut cost.