Investors may remain cautious for a while but opportunity, market remains huge
Soon after news of Deloitte resigning as Byju’s statutory auditor and three board members also putting in their papers came to the fore, Arindam Paul, founder of fan manufacturer Atomberg Tech, tweeted, “Was very sad to see what is happening at Byju’s today.”
“Byju’s was the flagbearer of Indian tech and one of the most well-known Indian startups globally. If they fail, the India startup story in the eyes of global investors will have an impact,” he wrote, adding that he never thought the startup was so valuable and “detested” their “borderline unfair sales practices”.
India is home to roughly 400 funded edtech startups by some estimates, including unicorns like Byju’s, Unacademy, Upgrad, Eruditus, Vedantu and Physicswallah. At $6 billion it is the second largest market for e-learning after the US, and it’s expected to grow to $10.5 billion by 2025, according to Blume Ventures. The sector has roughly 18.5 million paid users across K-12, test preparation and skill development, which will balloon to 120 million by 2030, believes KPMG.
Byju’s, which was last valued at $22 billion and counts China’s Tencent and US hedge fund Tiger Global among its investors, has been battling multiple issues for a while now—including delayed financials, allegations of mis-selling, valuation drops, steep losses, layoffs and a bitter legal dispute in the US over a $1.2 billion term loan.