Why Did Byju's Fail? The Rise and Fall of India's Biggest Edtech Startup
The short answer
Byju's failed because it grew on borrowed money and aggressive sales faster than its governance and cash flow could support. It took a $1.2 billion US term loan in November 2021, broke loan covenants within months (including by not filing audited financial statements on time), and US lenders later alleged it moved $533 million of loan money to an obscure hedge fund called Camshaft. With investors, lenders and the cricket board all chasing it, India's NCLT admitted insolvency proceedings against parent company Think & Learn in July 2024 over about Rs 158 crore owed to the BCCI.
Related on Page Twenty One: for the full story, read Byju’s unable to pay $1.2 Billion Loan and Byju's burn $600 Million in FY21.
On Page Twenty One we've asked why Hike Messenger failed and why CRED fell from fintech grace. Byju's is the biggest of these Indian startup stories, and it's still playing out in courts in India and the US.
From a $22B valuation in 2022 to investor marks of zero by mid-2024.
How big did Byju's get?
Byju's started as founder Byju Raveendran's test-prep classes and grew into a learning app used across India. During the pandemic, with schools shut, the company raised heavily and bought businesses, including test-prep chain Aakash Educational Services and US coding platform WhiteHat Jr. It became India's most valuable startup and sponsored the Indian cricket team's jersey, which is how the BCCI ended up as a creditor.
Byju's valuation, from peak to write-off
2022: Valuation peaks at about $22B
May 2023: BlackRock marks Byju's at about $8.3B
2023: Prosus cuts its mark to $5.1B, then below $3B
Late 2023: BlackRock marks it near $1B
2024: Rights issue prices the company around $225-250M; BlackRock and Prosus write stakes to zero
Sept 28, 2026: NCLT-approved Aakash settlement lifts the stake from 13.72% to 32%
What went wrong at Byju's?
1. Growth funded by debt
In November 2021, a US subsidiary, Byju's Alpha, was set up to borrow $1.2 billion in five-year term loans (a "Term Loan B") from US lenders, with GLAS Trust as their agent, according to US bankruptcy court records. Debt is cheaper than equity only if the business generates cash to service it.
2. Late accounts and broken covenants
A US bankruptcy court opinion summarizing the lenders' complaint lists several defaults in 2022, including failing to provide required financial statements in March 2022 and missing the deadline for audited annual statements in September 2022. The Economic Times notes the Ministry of Corporate Affairs wrote to Byju's about a 17-18 month delay in filing audited accounts for the year ended March 2021. When those results came out, they showed a loss of about Rs 4,588 crore.
3. The $533 million Camshaft transfer
This is the part that turned a debt dispute into a legal war. According to the court opinion, in April and July 2022 Byju's Alpha wired a total of $533 million to Camshaft Capital Fund, a Miami-based hedge fund run by a 23-year-old with no apparent investing track record. The lenders allege this left Alpha with about $100 million in cash against roughly $1.19 billion of debt, and that the transfer wasn't disclosed to them. These are allegations in litigation. Byju's has disputed the lenders' position in court.
4. Pressure from every side
Through 2023, lenders demanded repayment and pulled out of restructuring talks. Byju's sued them in New York. In 2024, investors tried to remove the founder at an extraordinary general meeting, and the dispute went to the Karnataka High Court. Then a comparatively small debt, about Rs 158 crore owed to the BCCI from the sponsorship deal, triggered insolvency in July 2024.
Where does Byju's stand now?
The insolvency case has bounced between tribunals. In October 2024, India's Supreme Court set aside an NCLAT order that had closed the proceedings after a settlement with the BCCI. In 2025, a resolution professional filed a Rs 1,597 crore suit against a Dubai-based marketing agent, and Mumbai's Economic Offences Wing registered an FIR against the founder and others over alleged student-loan fraud, according to the Economic Times. Much of the fight has been over Aakash, the most valuable remaining asset. Rights issues had diluted Think & Learn's stake to about 13.72%. On September 28, 2026, NCLT Bengaluru approved a global settlement with Aakash and the Manipal Group that raises Think & Learn's stake to 32%, according to Kirkland & Ellis, which advised the lenders' agent GLAS Trust.
The case is still contested. In October 2026, the Kerala High Court admitted a review petition by Voizzit, a Byju's creditor, alleging that a lender-authorisation letter GLAS relied on was forged, but it declined to stay the insolvency process. Kerala Police registered an FIR on the complaint. These allegations have not been proven.
Lessons for Indian founders
Governance is not paperwork. Late audits were the first crack, and they gave lenders a legal reason to act.
Pandemic demand isn't a baseline. Building a cost structure around lockdown-era usage left Byju's exposed when schools reopened.
Debt has a counterparty. Distressed-debt lenders enforce their rights in court. Equity investors usually can't.
Acquisitions don't fix the core business. Buying growth adds integration costs and complexity.
Frequently asked questions
Is Byju's bankrupt?
Byju's parent, Think & Learn, is going through a corporate insolvency resolution process (CIRP) that the NCLT admitted in July 2024. The case is ongoing.
Why did BCCI file against Byju's?
Byju's owed the BCCI about Rs 158 crore related to its Indian cricket team sponsorship. That default triggered the insolvency petition.
What is the Camshaft controversy?
US lenders allege that Byju's Alpha moved $533 million of term-loan funds to Camshaft Capital Fund in 2022 without telling them. A US court has allowed their claims to proceed. These remain allegations under litigation.
What happens to Aakash?
Under a settlement approved by the NCLT in September 2026, Think & Learn's stake in Aakash rises from about 13.72% to 32%, with added governance and exit rights.
Who is Byju Raveendran?
He is the former teacher who founded Byju's. Investors tried to remove him in 2024, and he faces several legal proceedings related to the company.
Related reading on Page Twenty One
Sources
Kirkland & Ellis, global settlement with Aakash and Manipal (Oct 26, 2026): https://www.kirkland.com/news/press-release/2026/10/kirkland-advises-think-learn-byjuscreditors-on-global-settlement-with-aakash-and-manipal
LiveLaw, Kerala High Court refuses to stay Byju's insolvency (Oct 27, 2026): https://www.livelawbiz.com/ibc/high-court/kerala-high-court-refuses-to-stay-byjus-insolvency-admits-review-plea-seeking-cbi-ed-nia-probe-556131
India Today, Kerala Police case over alleged forged lender letter (Oct 31, 2026): https://www.indiatoday.in/india/law-news/story/byjus-insolvency-kerala-police-glas-trust-alleged-forged-lender-letter-3029458-2026-10-31
The Economic Times, "Byju's crisis timeline": https://economictimes.indiatimes.com/tech/technology/byjus-crisis-timeline-from-edtech-giant-to-fighting-legal-battles/articleshow/124806544.cms
US Bankruptcy Court, D. Delaware, BYJU's Alpha, Inc. v. Camshaft Capital Fund (2025): https://exa.ai/library/legal/opinion/fv48mqyk9lm
Mint, "Why Byju's Aakash stake matters to creditors": https://www.livemint.com/companies/news/byjus-aakash-institute-insolvency-dispute-11790322698608.html
Mint, "Byju's resolution professional aims at Raveendran Singapore firm": https://www.livemint.com/companies/start-ups/byjus-resolution-professional-alleges-unlawful-conduct-aakash-ownership-battle-11770009648932.html
The Morning Context, "Lawsuit filed by Byju's lenders": https://themorningcontext.com/internet/lawsuit-filed-by-byjus-lenders-details-a-string-of-broken-promises
Image credits: cover background photo of a Byju's kiosk by Mehshaj, CC BY-SA 4.0, via Wikimedia Commons.
Comments