India’s prominent edtech startup, Byju’s, is facing fresh trouble as the country’s Enforcement Directorate (ED), the anti-money laundering agency, has allegedly discovered a violation of foreign exchange laws amounting to $1.08 billion. The ED intends to make these findings public as early as Tuesday, according to an insider.
Key Takeaway
The Enforcement Directorate in India has reportedly found evidence of Byju’s violating foreign exchange laws amounting to
.08 billion. Byju’s, a prominent edtech startup, has been grappling with a series of challenges, including missed revenue targets, high-profile departures, and criticism from major investors.
Investigation and Discovery
The ED’s investigation began in late April when it conducted searches at Byju’s premises and the residence of its founder, Byju Raveendran. During the raid, the agency claimed to have seized “incriminating” documents and digital data, leading to the subsequent discovery of the violation. Byju’s, however, remains confident in its compliance with local laws, stating that it has not received a formal notice from the ED.
Continuing Challenges for Byju’s
This revelation adds to the growing list of challenges that Byju’s has faced over the past six months. The Bengaluru-based startup, which was once valued at $22 billion, recently disclosed that it missed its revenue target for the previous financial year, ending in March. This disclosure came after a significant delay in releasing its accounts.
Furthermore, Byju’s has experienced notable personnel departures, including CFO Ajay Goel, who left to rejoin Vedanta, as well as the abrupt exits of auditor Deloitte and three key board members in June. In July, Prosus, a major investor in Byju’s, criticized the company publicly for its failure to evolve adequately and for disregarding investor advice and recommendations despite repeated attempts.
