New Delhi, Nov 21, 2023: 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.
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. Initially, they offered online learning programmes for competitive exams.
In 2015, the company launched the Byju’s learning app, their first step in what became a steep growth curve. Two years later, they launched a math app for children and another to help parents track their kids’ progress. By 2018, Byju’s had over 1.5 crore users as the company reaches millions of homes in small cities and rural areas. The app’s popularity got a massive boost during the Covid pandemic, when schools shut and children had to shift to a digital mode of education.
And then, the downturn began. After posting a massive loss in 2021, its value declined gradually. Soon after, it came on the radar of law enforcement agencies too.
Among the reasons cited behind the swift unravelling is a massive acquisition spree that became a liability when children returned to schools and business dropped after the pandemic.
Byju’s has also faced serious allegations regarding its functioning. Parents have accused the edtech major of coercing them into buying expensive courses and then backtracking on promises. The company has also faced allegations of treating its employees poorly and made headlines for laying off thousands as it tries to cut costs.
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.