How Byju's Raveendran, once a startup poster boy, landed on ED's lookout notice list

When the country's biggest star, Shah Rukh Khan, advertises your product on national television, it means you have arrived in your career. In contrast, when the Enforcement Directorate issues a lookout circular (LOC) against you, ordering you not to leave the country, it means you need to worry. That's the story of BYJU's CEO founder, Byju Raveendran, who rose to dizzying heights and then fell to abysmal depths in a span of little over a decade. The once-sought-after poster boy of the Indian startup landscape is now on the list of the agency that deals with economic offences of large proportions.

From building the most valued startup in India to inviting notoriety on a regular basis, the story of Raveendran and his startup, Byju's is full of glorious chapters and embarrassing moments. 

Unlike the majority of modern-age Indian entrepreneurs who come from large cities, Raveendra was born in Azhikode village in Kerala to teacher parents.

After completing his schooling at a Malayalam medium school, he pursued a Bachelor of Technology degree from the Government College of Engineering, Kannur.

Raveendran started helping students prepare for the Common Admission Test (CAT) and reportedly cracked the test with a 100 percentile.

The Kerala boy had a keen interest in teaching and continued helping students prepare for the CAT exam. 

He took his passion to a new level when he founded Byju's Classes in 2007, where his classes grew to 'medium size' in no time.

Byju's timeline

But the turnaround came in 2011, when he established Byju's with his wife, Divya Gokulnath, and started online classes. 

After 2010 onwards, smartphones in India were becoming popular, and the number of internet users was increasing significantly.

Raveendran was among the first to cash in on the paradigm shift.

Byju's became a household name when it launched an app in 2015.

The internet became cheaper in India by the end of 2016, and it was time for Byju's to grow manyfold.

The startup proved its growing prominence when he roped in Shah Rukh Khan as a brand ambassador in 2017.

With 15 million users in 2018, Byju's got the status of Unicorn (valued at $1 billion).

It became a globally renowned name when it replaced Oppo as the main sponsor of the Indian cricket team in 2019. 

In later years, the startup gathered momentum and went on to acquire WhiteHat Jr, Aakash, Toppr, Epic, and Great Learning after spending approximately $2 billion.

To expand its wings, Byju's raised a Term Loan B of $1.2 billion from US investment firm, Redwood. 

In the year 2022, when its valuation hit a high of $22 billion and it became the most valued Indian startup, Byju's announced football global star Lionel Messi as its first global ambassador, and flexed it muscles to become one of the official sponsors of the 2022 FIFA Cup.  

By that time, it appeared that everything Raveendran was touching was turning into gold, but an event that raised alarm was that the company had delayed its FY21 audited financial reports for 18 months.

When the startup reported its results in September 2022, it was clear that the grass was not greener on the other side.

Byju's reported losses of Rs 4588 crore.  

Reporting losses is not uncommon for startups, but Byju's losses were nearly 15 times more than the previous fiscal.

Above all, it came at a time when the world was confined to homes during the coronavirus pandemic-forced lockdowns, and online education companies were growing exponentially. 

Despite such poor results, Byju's managed to raise $250 million from its existing investor, Davidson Kempner.

But pressure mounted in December 2022 when creditors sought immediate part payment for $1.2 billion loan from Redwood.

When Redwood pressurised Byju's, the Indian startup moved against the US firm in a New York court. 

Even when the loan saga was going on, the ED searched Byju's parent firm, Think and Learn Private Limited, and Ravindran's house on April 27 and 28, 2023, for suspected violations of foreign exchange laws.

While the ED confiscated some documents, it also took a statement from Raveendran.

However, in November 2023, ED issued a show cause notice to Byju's parent company, Think & Learn Pvt Ltd, and Raveendran for alleged violations of Rs 9362.35 crore under FEMA. 

Rounds of layoffs, employee grievances, and customer complaints about coercing them to buy courses they could not afford added insult to Byju's injury. 

On ED's order, the Bureau of Immigration had already issued a 'LOC on intimation' circular against Raveendran one and a half years ago.

When such a circular is issued against an individual, immigration authorities have to inform the probe agency (ED in this case) whenever the individual go outside India.  

But ED's LOC order on Thursday forces a complete ban on Raveendran from leaving the country.

Even if he is overseas, he will not be allowed to leave India once he comes back to the country. 

A person whose startup app once became the case study at Harvard Business School and who was frequently invited by renowned global education and corporate institutions will not be able to step outside the country. 

In a latest development, Byju's shareholders want to hold a general meeting and form a new board by removing Raveendran from the board.

However, Raveendran got some relief from the Karnataka High Court, which said that any decision taken in the meeting will be invalid till the next hearing.

But Raveendran is walking on a tight rope, from where chances of falling looms large.