In recent years, few countries have dedicated as much effort to increasing their technological presence as India. As a direct consequence of this, we have come across situations such as the massive adoption of Bitcoin in the country. However, not all news is positive, as the decline of interest in the Asian region has caused India to become the broken toy of technology. Unfortunately, this has directly impacted companies that have lost a valuation of 20,000 million euros.
As indicated by the TechSpot portal in a recent publication, this is the situation that the company Byju is experiencing, one of the most promising startups in recent years. A few years ago, it rose meteorically during the COVID-19 pandemic, as the demand for online education increased significantly. For this reason, they carried out an aggressive expansion that led them to acquire more than two dozen startups and enter numerous international markets. However, Raavendran, founder of the technology firm, has acknowledged that the situation has gotten out of hand.
Confidence in a recovery, but everything seems to indicate otherwise
According to the original news, the founder admits that this strategy of excessive growth was a mistake, as they overestimated their potential and expanded too quickly. Unfortunately, the fall began in 2021 due to two aspects: the global market instability following the invasion of Ukraine to Russia and the venture capital crisis. This, combined with the departure of three key board members and the resignation of auditor Deloitte, affected Byju’s ability to raise more funds.
As a solution, they requested a loan of 1,000 million euros, but this turned out to be extremely costly and contributed to insolvency proceedings. Therefore, the company went from having a valuation of 20,000 million euros to being worth absolutely nothing. And, although Raavendran believes they will be able to make a comeback and has denied fraud allegations, this company’s situation raises doubts about the sustainability of fast growth models.
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