Byju's was founded in 2011. It was small & working alright. The going was good, till Sequoia invested its first $25M back in 2015. And then it all turned awesome. The money god started blessing the company with all its might when Sequoia first called its LPs Sofina to invest, and later brought many of its regular coinvestors like Chan Zuckerberg Initiative & Verlinvest to also join in. From 2015-21, from Series B to Series ह, it was a "revolutionary company with a legendary founder". It had raised around $4B (₹32,000 Cr) in cash alone, and then also taken over $1.2B in debt. Until some time ago, Sequoia's YT Channel had an episode featuring the Co-founder (Ms. Divya Gokulnath) on an episode of "SheBuilds". It talked about how inspiring she was.
But all the VC action wasn't based on a well thought strategy or insight. As is common with ponzi operators who've never run a lemonade stand in their lives, this was, well, just pure idiocy (or a pure scam). Absolutely nobody knew what they were doing; neither the VCs, nor the founders. And then, in an attempt of making sense of the money that had been raised, Byju's started acquiring cos en masse, for crazy sums. Here's a list of its acquisitions:
Aakash: $950M
Great Learning: $600M
Epic: $500M
Whitehat: $300M
Tynker: $200M
Toppr: $150M
Osmo: $120M
Vidyartha: $6M
TutorVista: $3M
Scholr: $2.2M
Now this didn't make any sense in any universe. Acquiring companies like that for over $3B was totally bizarre. But it helped to pump the Ponzi, so the VCs were very happy with it (and so were the founders, obviously). Interestingly, the financial performance of the company was frankly okay till 2020, but became a total horror show soon after. Here's a YoY breakup of its revenue/loss (in ₹Cr):
FY16: 110/49
FY17: 250/59
FY18: 471/38
FY19: 1305/9
FY20: 2189/262
FY21: 2280/4858
FY22: 5015/8245
So if you notice, the company was so reckless with the acquisitions that it blew up all the equity money it had raised, burnt all the debt fund, all while also hemorrhaging money at an FY level from 2021 onwards. Come 2023, it had no money left, and the Ponzi had finally fallen down.
And then what happened? Much after the entire forest was burnt to ashes, VCs suddenly woke up from their tender slumber to the "gross negligence" in the running of the operations, and found out that they had "no faith in leadership" after themselves having guided it to hell for full 8 years. Then we saw the boardroom showdown to oust the founders, and them fighting back.
Those were the 7 paragraphs. What about the 9 word summary? Here it goes:
VCs found a Ponzi, a founder got lucky. Nobody knew shit.
By the way, who suffered in all this? Only the employees and customers. The Average Aakash, as usual.
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